Tech stocks losing charm

Deepak Sahijwala & Sanjay R Bhatia

The uptrend continued on the bourses, amidst occasional bouts of corrections. Buying was witnessed in index heavyweights, old economy and power utility stocks. The first rain showers seemed to have revived interest in FMCG and auto stocks. Traders and speculators continued to build speculative positions in these stocks, while dumping tech stocks, especially the Digital script. Other frontline tech stocks also bore the brunt due to the perceived anti-minority shareholder Digital merger issue. FIIs continued to increase their inflows in Indian stocks and were net buyers alongwith mutual funds.

Technically, even though the benchmark BSE Sensex moved above its resistance level of 3326, to touch the 3351.36 level, it failed to sustain at this level, due to profit booking. It is likely to again test the 3354 level, if it sustains above the 3326 level. Already, volumes have dried up at higher levels, which is a sign of worry. On the downside the 3176 is likely to act as support level.

CMC
The CMC stock moved in a range of Rs 26, touching an intra-day high of Rs 478 on June 9 and an intra-day low of Rs 452 on June 10. As indicated in the last issue, CMC tested the Rs 477 level, but profit booking at higher levels resulted in a drop in prices. But it managed to hold above the Rs 455 level, which is a positive sign. If it again manages to move and sustain above the Rs 477 level, it is likely to test the Rs 496 level. On the downside, the Rs 444 level is an important support level.

Digital GlobalSoft
Digital moved in a range of Rs 190.95, touching an intra-day high of Rs 541.35 on June 5 and intra-day low of Rs 350.40 on June 9. The markets gave the thumbs down signal to the merger ratio arrived at between Digital and HP India, as it was perceived as working against the interest of the minority shareholders and a win-win situation for HP India. Technically, the Digital stock is likely to lose investor interest, and may fall further but could find support at the Rs 300 level.

HCL Technologies
The HCL Tech stock moved in a range of Rs 11.90, touching an intra-day low of Rs 137 on June 5 and an intra-day high of Rs 148.90 on June 11. As indicated last week, HCL tested the Rs 142 level and has managed to stay above it. Now, it is important that it continues to sustain above this level to test the resistance level of Rs 159. On the downside, the Rs 133 level is likely to act as a support level.

Infosys Technologies
Infosys moved in a narrow range of Rs 171.90, touching an intra-day low of Rs 2,827.10 on June 5 and an intra-day high of Rs 2,999 on June 9. It is likely to test the Rs 3,070 level in a few trading sessions. If it manages to sustain above this level, it could rise to test the Rs 3,500 level. On the downside, the Rs 2,653 level continues to be a crucial support level.

NIIT
NIIT moved in a range of Rs 14.70, touching an intra-day low of Rs 129 on June 5 and an intra-day high of Rs 143.70 on June 10. As indicated in the last issue, NIIT tested the Rs 137 level, after it passed the Rs 125 level. It has also managed to sustain above the Rs 137 level, which is a positive sign. Now, it is set to move above the 200-day moving average. If it continues to sustain above the Rs 137 level, it is likely to test the Rs 150 level. On the downside the Rs 120 level is an important support level.

Satyam Computers
Satyam moved in a range of Rs 10.15, touching an intra-day high of Rs 183 on June 5 and an intra-day low of Rs 172.85 on June 10. It has managed to sustain above the Rs 171 level, which is a positive sign. If it continues to sustain above this level, is likely to test the Rs 195 level in a few trading sessions. On the downside the Rs 167.50 level is likely to act as a support level.

Wipro
Wipro moved in a narrow range of Rs 46.20, touching an intra-day high of Rs 876.20 on June 5 and an intra-day low of Rs 820 on June 9. It is likely to face resistance at the Rs 905 level. On the downside the Rs 800 level could act as an important support level.

View the STRATSTAR FUND WIZARD BUY/SELL REPORT FOR 16/06/2003

Nasdaq

The uptrend continued on the Nasdaq, amidst occasional bouts of correction. It has continued to sustain above the 1603 level, which is a positive sign and is likely to test its resistance level of 1674. On the downside 1584 is likely to act as a support level.