Markets need to stabilise, range-bound trend expected

Deepak Sahijwala & Sanjay R Bhatia

Indian bourses have been extremely volatile during the week. The markets yo-yoed as traders and speculators were seen unwinding their long positions, especially in PSU stocks. FIIs continued to be net sellers on the back of uncertainty regarding economic policies. They have remained net sellers throughout this month. However, mutual funds continued to support the markets at lower levels and were net buyers.

Technically, the markets are likely to stay range bound after last week’s mayhem. It is important that the market takes a breather and stabilises for a trend to get established. Apart from the common minimum programme and cabinet formation, the markets are also likely to take cues from global markets and rising crude prices. It is also important that inflows of FIIs pick up and are on the positive side. Once the economic policy of the new government is in place they are likely to reconsider their allocation for India. On the upside, the Sensex is likely to face resistance at the 5400 level. On downside, the 4648 level is likely to act as an important support level.

CMC

The CMC stock has moved in a narrow range of Rs 85.05, touching an intra-day low of Rs 374.95 on May 17 and an intra-day high of Rs 460 on May 19. On the upside, it is likely face resistance at the Rs 524 level. On the downside, the Rs 425 level is likely to act as a support level.

HCL Technologies

The HCL Tech stock has moved in a range of Rs 57.35, touching an intra-day low of Rs 250.65 on May 17 and an intra-day high of Rs 308 on May 19. Even though, it moved above the Rs 294 level it was not able to move above its resistance level of Rs 310. On the upside, it is likely face resistance at the Rs 310 level, if it succeeds in moving and sustaining above this level, it is likely to test the Rs 327 level. On the downside, the Rs 262 level is an important support level.

Infosys Technologies

Infosys has moved in a range of Rs 924.60, touching an intra-day low of Rs 4,125.10 and an intra-day high of Rs 5,049.70 on the same day on May 17. On the upside, it is likely to face resistance at Rs 5,651. On the downside, the Rs 4,418 level is an important support level.

NIIT

NIIT has moved in a range of Rs 41, touching an intra-day low of Rs 103 on May 17 and an intra-day high of Rs 144 on May 17. On the upside, the Rs 174 level is likely to act as a resistance level. On the downside, the Rs 115 level is likely to act as an important support level, if it breaches this level then it is likely to test the Rs 95 level.

Polaris Software

Polaris has moved in a range of Rs 34.80 touching an intra-day low of Rs 110 on May 18 and an intra-day high of Rs 144.80 on May 19. On the upside, the Rs 156 level is likely to act as a resistance level, if it succeeds in moving and sustaining above this level it is likely to test the Rs 171 level. On the downside, Rs 107 level is an important support level.

Satyam Computer

Satyam has moved in a range of Rs 89.40, touching an intra-day low of Rs 230 on May 17 and an intra-day high of Rs 319.40 on May 19. 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 range of Rs 420, touching an intra-day low of Rs 1,190 on May 17 and an intra-day high of Rs 1,610 on May 18. 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

The Nasdaq has continued to move in a range bound trend. The overall sentiment on the Nasdaq has been cautious on back of the rising crude prices and Iraq woes. The Nasdaq has continued to languish below its 200-day moving average, which is a negative sign. Now, it is important that the Nasdaq moves above its 200-day moving average for any rally to begin and sustain. On the upside, it is likely to face resistance at the 1967 level. On the downside, the 1881 level is likely to act as an important support level.