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Tuesday, Jan 08, 2002

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Bull run arrested

K. Premkumar

INITIAL hours of Monday's trading witnessed bull domination. Later on, bears took over and wiped out the early gains made by the bulls. Bear managed to gain marginally from the day's trading. The sentiment reading of the tradable counters continues to remain bullish. The prevailing bullish sentiment is likely to continue on Tuesday also with a slight change in its value.

Nifty futures recommendation: The near month January contract opened with a bull gap of nine points and went further by two points. Thereafter the bears came back strongly and recouped their losses. January contract closed with a loss of 3 points with respect to Friday's close.

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The long position in the January contract is likely to remain safe. Its exit and bearish trigger levels are placed very far away from its current level. These levels are unlikely to be triggered on Tuesday.

Stock futures recommendation: The composition of the top-10 tradable counters remains unchanged. The ranking of the list had a few changes. Infosys moved to the second position followed by Digital and Reliance Industries to the fourth position. Satyam Computer continues to dominate the trading activity in stock futures segment with more than 6000 trades.

The prevailing uptrend in ACC and Dr Reddy's Lab is likely to be under threat from the bears. So, traders holding positions in the above two counters will have to closely monitor their price movements.

Traders are left with a lone opportunity for Tuesday's trading. This is likely to exist on the short side of L&T. This counter is in the sideways mode. Its sell level is placed closer to its closing price. Bear move on Tuesday is likely to initiate a fresh downtrend in this counter.

Cash segment: There were no new entries or exits to the top-10 tradable list in the cash segment. The ranking of the list underwent a change. Satyam Computer and Digital interchanged its position.

Bear domination on Tuesday is likely to terminate the uptrend in Polaris Software and Rolta. Traders are left with a lone opportunity for Tuesday's trading. This is likely to exist on the short side of GTL (formerly Global Tele-Sys). The same counter was recommended for Monday's trading. Bears were unsuccessful in initiating the downtrend in this counter. Its bearish trigger is moved up further to its last traded price. Hence, bear domination on Tuesday has the potential to initiate the downtrend in this counter.

(Note: All price levels refer to the absolute value of the shares traded on the NSE. There is risk of loss in trading.)

The author is a Chennai-based technical analyst and fund management consultant.

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