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Wednesday, Apr 03, 2002

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Mild bear domination

K. Premkumar

TUESDAY'S trading witnessed mild bear domination. Bears managed to regain their hold after a span of three trading days. The market sentiment reading of the tradable counters stands mildly bearish. Bull domination on Wednesday is likely to neutralise the prevailing sentiment reading. On the contrary, the prevailing sentiment is likely to continue with added strength.

Nifty futures recommendation: The near month April contract opened with a bull gap of 3 points and gained another 4 points. Later on, the bears took over and wiped out their early losses. The movement in the April contract was around 11 points. It closed with a loss of around 2 points with respect to previous close.

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Bears were successful in initiating the downtrend in the April contract. However, the short position is in the danger zone. Bullish trigger level for the April contract has moved down. In the normal course of trading on Wednesday, the downtrend is likely to continue. Bull domination has the potential to reverse the prevailing downtrend in the April contract.

Stock futures recommendation: The top-10 tradable list in this segment had a change. BHEL gained entry with the exit of MTNL. BPCL and Digital interchanged their positions. The stop-loss for the long position in MTNL is placed at Rs 153.45.

The prevailing downtrend in Digital, Infosys and Satyam Computer is likely to be under threat from the bulls. On the other hand, the uptrend in Hindustan Petro, Ranbaxy and Reliance Industries is likely to be under threat. Traders holding positions in the above counters will have to be cautious.

For Wednesday, there is unlikely to exist any buying opportunities for the bulls. Selling opportunities are likely to exist in Ranbaxy, Reliance Industries, Sterlite Optical and Tata Engg. The best bet is likely to be in Tata Engg for Wednesday's trading. Its sell level is placed quite closer to its last traded price. Bear pressure on Wednesday is likely to initiate a fresh downtrend in this counter.

Cash segment: The composition of the top-10 tradable counters in this segment remained intact. The ranking of the list remained the same with no major changes.

Bear domination on Wednesday is likely to terminate the uptrend in Hindustan Petro, Reliance Industries and VisualSoft. The downtrend in Digital, Infosys, Satyam Computer and Zee Tele is likely to be under threat. Bulls are likely to have opportunity in Satyam Computer and Zee Tele. Selling opportunities are likely to exist in Mastek and Reliance Industries. The best among the above is likely to be the selling in Mastek. This counter is in the sideways mode. Its bearish trigger level is placed closer to its closing price. Bear move on Wednesday is likely 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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