The fall could have been extremely sharp had HLL participated. In fact, with support of huge volume, this counter gained more than 7 per cent, and helped the Sensex.

While the fall may not have been very sharp, the outlook for the Sensex continues to remain negative.

The fall is likely to continue and the major base for the Sensex is at around 4050 points. On the upper side, the level of 4270 points is the first hurdle, and the next resistance exists at 4320 points.

Individually, HLL has performed well, and has moved above its strong resistance of Rs 248. The level of Rs 262 has become new resistance and outlook will further improve above this level.

Meanwhile, the position of Infosys, Satyam Comp, and Zee Tele has weakened further as all these counters have dipped below their medium term support. The outlook for the these counter is negative, and the fall may gather momentum. Even if rally occurs, it would find it difficult to sustain. As for SBI, L&T, MTNL, and ITC are concerned, the outlook is weak. SBI has a strong resistance at Rs 209, and outlook should improve above this level. On the downside, the fall may gather momentum below Rs 198.

For ITC, the resistance exists at Rs 775, and outlook will improve above this level. On the downside, it has a good support at Rs 735.

In the case of MTNL, the stock has made a resistance at Rs 177, and unless this level is crossed, the bears will have a strong hand on this counter. The outlook for Bhel, ACC, Telco, and Tisco is also far from impressive. Overall, the sentiment is negative, and values may show a further slide. As far as the software stocks are concerned, with the latest fall, the position of these counters has weakened further. Stocks like NIIT, Dig Equipment, Silverline, Rolta, SSI, Wipro, Satyam Comp, and DSQ Soft appear extremely weak.