Profit taking shaved off 15 points off the Sensex, which closed at 2962. While the index posted an intra-day high of 3017, the fact that it closed lower than the last two days closing makes it susceptible for further slide.The market opened on a confident note at 2987, some ten points higher than the previous close of 2977. The intra-day high of 3017 was 28 points higher than the previous high of 2989. The fact that the low for the day at 2962 was higher than the corresponding previous figure of 2949 is poor compensation when you look at the closing. The close of 2935 is lower than the previous close of 2977 and that of Monday. This has imparted a weakness to the index.On the daily charts the stochastic indicator has cut downwards of its trigger line. The implication of this development is that you should keep in mind the possibility of the Sensex weakening further over the next 2-3 days, possibly not immediately.
The 12-day exponential moving average is at 2935. The Sensex is 27 points higher than thisaverage. By this criteria the market has not turned bearish yet.
So we are in a threshold region. And the action of the market players will decide whether the downward tendency, which was significant on Wednesday will continue further.
Scripwise, ITC could firm up, NIIT has not turned weak. Indian Hotel has firmed up. HPCL has hit the peak of Rs 242 and therefore it is difficult to see if it will continue to push Sensex up. MTNL, SBI and BSES might renew support even after some profit taking.
On the other hand the following scrips are weak - Bajaj Auto, Bhel, Castrol, Colgate, Grasim, ICICI, Infosys Technologies, Novartis and Reliance Industries.
Sensex will look for support at 2940 on Thursday. Should the downward momentum gather the index will find support ultimately at 2887 in the next few days.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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