It was a dream beggining. On the first day of the new year, the BSE index gained 370 points. The gain came from all quarters but Infosys, HLL, ITC, RIL, NIIT, Ranbaxy, L&T, MTNL, and SBI were the main contributors. It opened with a gap, during the first half-an-hour of the day, and gained more than 300 points.The sentiment is extremely bullish, and the outlook is positive. Infosys made a history by crossing HLL's market capitalisation. The stock is yet to show signs of weakness, and till it does that, it would be unreasonable to expect a correction. HLL too has improved its position on Monday by gaining more than 6 per cent.
For short-term, the level of Rs 2300 would act as a good base for the stock. As for Reliance, it has given a fresh breakout by moving above its medium term resistance. One expect the stock to show further gains. SBI is not as impressive but the position of the stock has improved drastically. The stock has above its short-term resistance and is likely to remain bullish.
ITC too showed smart gains on Monday, but whether it will sustain the rally, is yet to be seen. The stock has formed a higher bottom, but the real strength would come only above Rs 755. For MTNL too, the outlook appears positive. The stock has moved above its short-term resistance, and is likely to remain bullish in the near future. Ranbaxy has also showed impressive gains. NIIT is extremely bullish, and is expected to gain further.
Overall, since a large portion of sensex-based stocks are strong, the outlook for the sensex remains positive. For the software sector, buying force is yet to slow down. If Monday's trend is any indication to go by, one can expect the software stocks to record further gains. Stocks like Satyam, Digital Equipments, Silverline, SSI, Wipro, Rolta, HCL, Himachal Futuristic, Global Tele, Tata Elxsi, and Hughes Soft are extremely bullish, and likely to continue their northbound journey.
Among the non-software segment, stocks like Mahindra & Mahindra, Siemens, Reliance Capital, Dr Reddys' Lab, Wockhardt, Nicholas Piramal, Cipla, Grasim, BSES, Hindalco, ICICI, ICICI Bank, Bombay Dyeing, Bharat Forge, Dabur, Essel Packaging, Pfizer, Titan Industries, Amaraja Batteries, Trent, Philips, and Indian Rayon. In fact, stocks like M&M, Philips, Dr.Reddy's Lab, and Bombay Dyeing have given a fresh buy signal. One can take long position on these counters for medium term gains.
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.