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Dreary outlook for key pivotals

B. Krishnakumar

AS observed last week, the Nifty (969.6) appears to be headed towards the target zone at 945-950. In line with expectations, the close below 985 imparted weak undertone.

On the upside, the index could face resistance around the 980-983 band. Taking short positions would be the preferred course of trading action as far as Nifty is concerned. As far as the Nifty constituents are concerned, the outlook for key pivotals does not appear too positive.

ITC (Rs 657): The price action in the counter was in line with last week's expectation. After moving towards the Rs 700 mark, the scrip turned weak and went on to touch a low of Rs 640 on Friday. It, however, recovered towards the close at Rs 657 for the week. As observed in earlier weeks, the outlook for ITC continues to remain weak. The immediate target is at the Rs 600-610 mark. Drop below Rs 640 could be used to take short positions while fresh buying may be avoided.

Hindustan Lever (Rs 176): As observed last week, the share price of the company ruled weak. The scrip dropped below the crucial downside trigger price of Rs 175. The outlook for the stock continues to remain weak and a test of the Rs 160-165 band appears likely. Existing holders could look for avenues to reduce exposures while fresh buying may be avoided. Aggressive traders could also contemplate short positions with a stop loss at Rs 182.

Infosys Technologies (Rs 3,509.7): The scrip moved in sync with last week's expectations. After dropping to the support level of Rs 3,350-3,400 that was mentioned last week, the share price closed on a relatively positive note at Rs 3,509 on Friday. The near-term trend in the counter would hinge on the price action in the next few days. A close below Rs 3,370 would impart bearish trend and could push the scrip to the Rs 3,100-3,150 band. A close above Rs 3,710 would have positive implications. Existing holders could remain invested with a stop at Rs 3,370. Fresh buying may be deferred for the time being.

Satyam Computers (Rs 224.75): The price action in Satyam was almost in sync with that of Infosys. As observed last week, drop below Rs 230 imparted bearish trend in the scrip. The immediate downside target for Satyam is at the Rs 205-210 band. Existing holders could reduce exposures while fresh buying may be avoided. A drop below Rs 217 could be used to take fresh short positions. At the moment, only a close above Rs 238 would blunt the overall weak outlook.

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