Back come the bulls!

Deepak Sahijwala & Sanjay R Bhatia

The broad-based rally continued on the bourses, amidst occasional bouts of corrections. Buying in index heavyweights and banking stocks along with Old Economy stocks perked the Sensex. Buying was also witnessed in tech stocks on the back of gains on the Nasdaq. Traders and speculators continued to build speculative positions into banking, Old Economy stocks and in tech stocks. Meanwhile, FIIs continued to increase their inflows in Indian stocks and were net buyers. However, mutual funds were net sellers.

Technically, the benchmark BSE Sensex continued to stay above its 200-day moving average and this is a positive sign. It also moved above the resistance levels of 3,210 and 3,244, which augurs well for the markets. Now it is important that it consolidates at the present levels. It is likely to witness occasional bouts of correction. Overall sentiment on the bourses is optimistic and if the rain gods don’t play havoc the present rally is likely to continue. The benchmark BSE Sensex is likely to face resistance at the 3,260 and 3,285 levels. On the downside, 3,176 is likely to act as support level.

CMC
The CMC stock moved in a range of Rs 45.50, touching an intra-day low of Rs 432.50 on May 29 and an intra-day high of Rs 478 on June 2. It has managed to stay above the Rs 425 level, which is a positive sign. Now, it is important that it stays above the Rs 455 level for it to test the next resistance level of Rs 477. On the downside, the Rs 425 level is an important support level.

Digital GlobalSoft
Digital moved in a range of Rs 43.85, touching an intra-day low of Rs 493.15 on May 30 and intra-day high of Rs 537 on June 4. As we had indicated in our last issue, Digital has witnessed a rally. It is likely to test its resistance level of Rs 546 and if it succeeds it is likely to test the Rs 580 level. On the downside, the Rs 505 level is likely to act as a support level.

HCL Technologies
The HCL Tech stock moved in a range of Rs 15.10, touching an intra-day low of Rs 122.75 on May 29 and an intra-day high of Rs 137.85 on June 4. HCL has witnessed a rally as it has managed to sustain above the Rs 119 level. Now, it is important that it sustains above the Rs 137 level for it to test the Rs 142 level. On the downside, the Rs 123 level is likely to act as support level.

Infosys Technologies
Infosys moved in a narrow range of Rs 186.95, touching an intra-day low of Rs 2,661.05 on May 30 and an intra-day high of Rs 2,848 on June 3. A minor rally has been unfolding on Infosys, but with lower velocity. The rally is likely to gain momentum in future trading sessions and it is likely to test the Rs 3,070 level. On the downside, the Rs 2,653 level is a crucial support level.

NIIT
NIIT moved in a range of Rs 10.40, touching an intra-day low of Rs 118 on May 29 and an intra-day high of Rs 128.40 on June 2. It is likely to test the Rs 137 level if it sustains above the Rs 125 level. On the downside, the Rs 120 level is an important support level.

Satyam Computer
Satyam moved in a range of Rs 14.80, touching an intra-day low of Rs 164.05 on May 29 and an intra-day high of
Rs 178.85 on June 4. It has managed to sustain above the Rs 171 level, which is a positive sign. If it continues to stay above this level, it is likely to test the Rs 194 level. On the downside, the Rs 167.50 level is likely to act as a support level.

Wipro
Wipro moved in an extremely narrow range of Rs 42, touching an intra-day low of Rs 805 on May 30 and an intra-day high of Rs 847 on May 29. It has completed the minor divergence pattern and a minor rally is likely to unfold in future trading sessions. It is likely to face resistance at the Rs 905 level, if it succeeds in moving and sustaining above this level, it is likely to test the Rs 981 level. On the downside, the Rs 800 level is likely to act as an important support level.

View the STRATSTAR FUND WIZARD BUY/SELL REPORT FOR 09/06/2003

Nasdaq

The rally continued on the Nasdaq and it has moved above its resistance level of 1,603, which augurs well for the indice. Now it is important that it continues to sustain above the 1,603 level. The present rally is likely to continue with occasional bouts of intermediate corrections. It is likely to face resistance at the 174 level. On the downside, the 1,573 level is likely to act as a support level.