Markets to move in a rangebound trend

Deepak Sahijwala & Sanjay R Bhatia

THE markets witnessed a broadbased rally on the back of positive announcements by tech leader Infosys. The liberal 3:1 bonus announcement and the Rs 100 special dividend caught the markets by surprise. Hopefully, the positive guidance by Infosys signals an end to the woes of the tech sector. Traders and speculators were seen buying into frontline tech stocks on expectations from other tech companies following the Infosys example. FIIs, incidentally, continued to remain net buyers during the week, while mutual funds continued to remain net sellers.

Technically, the benchmark BSE Sensex has sustained over the 5550 level for 11 trading days, which is a positive sign. Now it is important that it stays above this level for another trading day to complete the 12-day trading cycle. Overall, sentiment continues to remain optimistically cautious, but markets could move in a rangebound trend ahead of the upcoming Lok Sabha and assembly elections in some Indian states. On the upside, the Sensex has been able to sustain above the 5816 level. Now it is important that it moves and sustains above another resistance level at 5935 for it to test the psychologically important 6000 level. On the downside, the 5550 level is likely to act as a support level.

HCL Technologies

The HCL Tech stock has moved in a range of Rs 41.40, touching an intra-day low of Rs 262 on April 12 and an intra-day high of Rs 303.40 on April 15. On the upside, if it continues to sustain above the Rs 294 level, then it is likely to test the Rs 325 level. On the downside, the Rs 247 level is an important support level.

Infosys

Infosys has moved in a range of Rs 796.60, touching an intra-day low of Rs 5,092.35 on April 12 and an intra-day high of Rs 5,888.95 on April 13. The liberal bonus announcement of 3:1 and a special dividend of Rs 100 helped Infosys rally, but profit booking at higher levels saw some of the gains eroding. On the upside, it is likely to face resistance at the Rs 5,651 and the psychologically important Rs 6,000 level. On the downside, the Rs 4,938 level is an important support level.

Satyam

Satyam moved in a range of Rs 27.60, touching an intra-day low of Rs 309.85 and an intra-day high of Rs 337.45 on April 13. On the upside, it is likely to face resistance at the Rs 342 level. On the downside, the Rs 290 level is likely to act as an important support level.

Wipro

Wipro has moved in a narrow range of Rs 206.80, touching an intra-day low of Rs 1,441.20 on April 12 and an intra-day high of Rs 1,648 on April 15. Wipro too has followed the footsteps of Infosys by declaring a liberal 2:1 bonus. On the upside, it is likely to face resistance at the Rs 1,632 level, and if it manages to move and sustain above this level it is likely to test the 1,731 level. On the downside, the Rs 1,360 level is an important support level.

Nasdaq

Nasdaq has moved in a rangebound trend, but has continued to stay above the psychologically important 2000 level, which is a positive sign and augurs well for the future. On the upside, the 2091 level is likely to act as a resistance level. On the downside, the 1994 level is likely to act as an important support level.