We had indicated in the last issue that a rally might unfold on the BSE, which could take the benchmark BSE Sensex above the 3365 level. This came true as the index touched an intra-day high of 3366.74 on July 10. The positive sentiment on the Indian bourses was sustained during the last week as traders and speculators bought into Old Economy and tech stocks. FIIs continued to buy Indian stocks and were active in selective counters. Mutual funds on the other hand were net sellers during the week.

Technically, the BSE Sensex was unable to stay at the 3365 level due to a weakness on bourses in the US and other European and Asian countries. Several accounting frauds and continuing future earnings worries by US companies, has taken its toll on the Dow Industrial and Nasdaq, which is likely to have a trigger effect on Indian infotech stocks and the general market. The BSE Sensex is likely to face resistance at the 3365 level. If this level is crossed successfully it is expected to rise past the 3443 level, but this will happen after the present correction on the bourses is completed. On the downside, the benchmark BSE Sensex is likely to find support at the 3285 level and later at the 3244 level.

CMC
The CMC stock continued to move in a narrow range of Rs 42.90 during the course of the week, touching an intra-day high of Rs 552 on July 8 and an intra-day low of Rs 509.10 on July 10. The downward trend on the CMC stock continued as we had indicated in the last issue. The stock has breached the Rs 500 mark and could fall to a level of Rs 459 before finding support. The downward trend is likely to continue with occasional bouts of correction.

Digital Globalsoft
After the last week’s volatility, the Digital stock moved in a narrow range of Rs 31.20 during the course of this week, touching an intra-day high of Rs 713.70 on July 8 and an intra-day low of Rs 682.50 on July 10. Profit booking at higher levels has limited gains. The stock is likely to move in a rangebound manner for a few trading sessions.

HCL Technologies
As we had indicated in the last issue, the HCL Tech stock faced selling pressure at higher levels due to profit booking. It has moved in a range of Rs 22.75 during the course of the week, touching an intra-day high of Rs 250.90 on July 8 and an intra-day low of Rs 228.15 on July 10. Even though it was able to move above the Rs 245 level it was unable to stay at this level and has since fallen. The stock should find support at the Rs 220 level, but faces resistance at the Rs 244 level.

Infosys
The Infosys stock moved in a narrow range of Rs 163.70 during the course of the week, touching an intra-day high of Rs 3,480 and an intra-day low of Rs 3,316.30 on July 10. Though Infy released better than expected Q1 results on July 10, the Infosys management has not changed the guidance for the year. In fact, they have issued a cautious note on future earnings, due to the present geopolitical situation, which continues to worry their clients and foreign companies. On the downside, the Infosys stock is likely to find support at the Rs 3,264 level and later at the Rs 3,139 level.

NIIT
The NIIT stock moved in a range of Rs 22.35 during the course of the week, touching an intra-day low of Rs 244.05 on July 5 and an intra-day high of Rs 266.40 on July 8. It has broken below an important support level of Rs 253.30 and is likely to fall further, but could find support at the Rs 241 level and later at the Rs 229 level.

Satyam Computers
The Satyam stock moved in a narrow range, touching an intra-day low of Rs 237.50 on July 5 and an intra-day high of Rs 259 on July 9. The Satyam stock is likely to find support at the Rs 243 and later at the Rs 238 level. On the upper side, the Satyam stock continues to face resistance at the Rs 260 level.

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Nasdaq

The weakness on US bourses continued during the course of the week, as more US companies admitted accounting malpractices. The Nasdaq, taking a cue from the NYSE, continued heading downward as investors continued to sell. Broad based selling is being witnessed on both the exchanges due to accounting frauds and also due to the earnings warnings. The Nasdaq has fallen below its support level of 1356 and is likely to fall further until the US government takes some concrete steps to bring back investor confidence.

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