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Lost
ground was recovered on the markets after the initial jolt
the bourses suffered due to cancellation of interim dividend
by major corporates, consequent to SEBI’s order to the
stock exchanges, asking them not to relax the 30-day notice
period for fixing the record date to distribute dividend.
However, having discounted the dividend factor, smart gains
were posted on Thursday when the BSE Sensex rose by 75.83
points to close the day at 3,690.27. Mirroring the BSE gains,
the S&P CNX Nifty gained 20.45 points to end the day at
1193.05. Infotech stocks led the rally, as FIIs bought heavily
in this sector. The renewed interest in this sector has been
a welcome relief since most software stocks had underperformed
the markets for a long time. This augurs well, more so since
the NASDAQ has also started posting smart gains. Traders and
speculators continue to remain active in second rung infotech
stocks. In contrast, mutual funds were seen selling in PSU
stocks.
Technically, the benchmark BSE Sensex and Nifty are displaying
extremely bullish signals and the post budget rally still
reflects steam. The only factor that could hinder this rally
could be the uncertainty caused due to the Ayodhya and Gujarat
problem. If these matters don’t take a turn for the worse,
the markets will post smart rallies. Infotech counters would
then become the best bet and could outperform the markets
in this rally.
CMC
Our prediction that the stock could witness a fall during
the present consolidation phase has come true. The stock has
fallen from an intra-day high of Rs 395 touched on 18 February
to the present closing level of Rs 342.95, on 7 March. The
stock has moved in a range of Rs 20 during the course of this
week, touching an intra-day high of Rs 358 on 5 March and
a low of Rs 338 on the same day. The present consolidation
phase has still not ended. It is in the final phase of consolidation
and should not fall below the Rs 329 level. Any rally on the
bourses should trigger a rally in the stock and should take
the stock to a level above Rs 405.
Digital Globalsoft
As we had indicated in our past few articles, the Digital
stock continues to display weakness on the daily as well as
weekly charts. The volatility has increased in the stock as
it touched an intra-day low of Rs 523.80 on the day of the
budget. It has moved in a range of Rs 36.55, touching an intra-day
high of Rs 588.70 on 4 March and intra-day low of Rs 552.15
on 6 March. It will continue to display volatility and consequently
decline slowly. The only factor that could see this stock
rally could be the impending HP-Compaq merger. Any favourable
news on that front could see this stock make a sharp rally.
Investors could hold their sell position in the stock with
a stop loss of Rs 615.
HCL Technologies
The stock has moved above its 200-day moving average and is
displaying bullish signals. It has moved in a range of Rs
27.10 during the course of the week, touching an intra-day
high of Rs 297.20 on 7 March and intra-day low of Rs 270.10
on 4 March. HCL, probably, is all set to rise above the Rs
322 level from the present levels of Rs 294.95 in the coming
few weeks and any fresh rally on the bourses will help it
to move above this level.
Infosys
The expected fall in this stock did not materialise and the
stock is emitting extremely bullish signals on the daily as
well as weekly charts. The stock has moved in a range of Rs
547.75 during the course of the week, touching an intra-day
high of Rs 4,169.95 on 7 March and intra-day low of Rs 3,622.20
on 4 March. The next expected rally would be led by infotech
stocks with Infosys emerging as the biggest winner outperforming
the markets. The next rise in the stock will take it above
the Rs 4,872 level from the present level of Rs 4,126.30 touched
on 7 March.
NIIT
The sideways movement continued in the stock as it moved in
a range of Rs 14.95, touching an intra-day high of Rs 230
on 7 March and an intra-day low of Rs 215.05 6 March. The
stock is expected to move above its 20 day moving average
in a few trading sessions, which will trigger a fresh rally
and even generate movement above the Rs 500 level.
Satyam Computers
After moving sideways for a few trading sessions the stock
is showing signs of strength. It moved in a range of Rs 21.10
during the course of the week and touched an intra-day high
of Rs 296 level on 7 March and an intra-day low of Rs 274.90
on 6 March. A sharp rally is expected, and if it can move
above the psychological Rs 300 level, the stock could rally
above the Rs 415 level.
Wipro
Wipro moved in a range of Rs 188.60 during the course of the
week, touching an intra-day high of Rs 1,853.70 on 7 March
and an intra-day low of Rs 1,655.30 on 4 March. Like other
frontline infotech stocks, this stock too is emitting bullish
signals and is likely to move above the Rs 3,000 level.
Nasdaq
turns bullish too
As
indicated in the last issue, the Nasdaq in our opinion has
clearly bottomed out by moving above the 1,804 level decisively.
Now it is necessary that it stays above this level for four
trading days, followed by 12 trading days. If the Nasdaq is
successful in staying above this level for 12 trading days,
this level would become an important support level and should
be the start of a fresh and a long Bull move. This development
would be positive for Indian software stocks too, and they
should see a fresh lease of life after a pathetic recent display
over the past twenty odd months.
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