Date:24/10/2004 URL: http://www.thehindubusinessline.com/bline/iw/2004/10/24/stories/2004102401010700.htm

Back Reliance may seek lower levels

B. Krishnakumar

Reliance Ind (Rs 538.9): The stock ruled firm in the early part of the week and turned bearish in the last couple of trading sessions. The weakness in the stock was instrumental in imparting a bearish sentiment to the market. The near-term trend does not appear positive. A drop to the Rs 520-525 range appears likely. The stock has to move past Rs 563 for the onset of a positive trend. Long positions may be avoided for the time being.

ONGC (Rs 798.8): The stock moved in a directionless manner last week and was stuck in a narrow trading zone. A strong trend would emerge only if the stock breaks out of this zone. The recent price patterns indicate that the stock could slide to lower levels this week. A drop to the Rs 755-760 range is not ruled out. This view would gain validity if the share price declines below Rs 780. Existing holders may reduce exposures. A drop below Rs 780 may be used to dilute holdings. Only a move past Rs 840 would impart bullishness. Fresh buying may be avoided.

Cipla (Rs 275): The stock has been on a downward trend in recent weeks. The bearish trend is not complete as yet. A drop to the Rs 255-260 range appears likely. The long-term positive trend would resume on the completion of the ongoing downward move. Long-term investors may sell a portion of the holdings and contemplate buying on a drop to the Rs 255-260 range. Fresh exposures can be considered on price weakness.

Infosys (Rs 1777.7): The stock ruled weak and failed to move towards the target zone of Rs 1839-1840. This has, however, not negated the possibility of a rally to this zone. A drop below Rs 1740 would be a negative development and would blunt the positive outlook for the stock. Traders holding long positions may remain invested with a stop-loss at Rs 1740. Fresh buying may be avoided for the time being.

Hindalco Industries (Rs 1229): The stock moved in line with expectations. As observed last week, the long-term outlook is positive. After a short-term spurt, the stock is likely to resume the downward trend. A drop to the Rs 1150-1160 range appears likely. The long-term upward trend would assert itself once the weekly downward cycle gets completed. Fresh buying may be considered on evidence of support at the Rs 1150-1160 range.