Weak trend in Satyam, HLL

B. Krishnakumar

THE share price of ITC (Rs 756.6) was confined to a narrow range last week. As the scrip is yet to complete the ongoing downward cycle, existing holders need to look for avenues to clip exposure.

Fresh short positions may be contemplated with a stop loss at or above Rs 784. A decline below Rs 730 would result in a sharp slide in ITC's share price. This would also lead to a test of the previous low of Rs 702.2.

Hindustan Lever (Rs 169.4): The previous week's call of an uptrend in the scrip proved to be incorrect. The share price ruled weak, pushing the stock into a fresh short-term downtrend.

The scrip appears vulnerable to a decline below the immediate bottom of Rs 163. Existing holders could use intermittent price rally to pare exposures. Aggressive traders could initiate short positions with a stop loss at or above Rs 180.

Infosys Technologies (Rs 7,210): The share price of the company failed to touch the target price of Rs 7,500. However, the scrip managed to bounce back from the support level of Rs 6,750-6,850 mentioned last week.

On the upside, the stock now faces resistance at the Rs 7,350-level. Given that the scrip has reached the top of the upward cycle, it would be safer to book profit and contemplate re-entry on declines.

Satyam Computer (Rs 322): After a practically similar price pattern in Infosys and Satyam, there has been a sharp divergence in the price formation of these two stocks over the last couple of weeks. Unlike Infosys, the Satyam stock now appears to be headed towards a steady further decline. It could ease below the immediate low of Rs 292. Existing holders need to look for exit avenues while fresh exposures may be avoided for the time being.

(Note: This column analyses the outlook for major Nifty constituents based entirely on the technical analysis of the past price behaviour of the scrip concerned. There is a risk of loss in trading.)