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Thursday, May 09, 2002

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Bulls march ahead

K. Premkumar

BULLS extended their dominance over Wednesday's trading. Bears were unable to make any recovery during the day's trading. The market sentiment reading of the tradable counters stands strongly bullish. Bear domination on Thursday is likely to neutralise the sentiment reading. On the other hand, the prevailing bullish sentiment is likely to continue with added strength.

Nifty futures recommendation: May month future contract opened 2 points above the previous close and gained another 8 points. Bulls were in total control of the day's proceedings. The May contract closed with a gain of around 8 points over Tuesday's close.

Bull domination during the day led to the initiation of uptrend in the May contract. The exit level for the uptrend is placed in the danger zone. Bear move on Thursday is likely to trigger this level. Bearish trigger level is now placed quite far away and this is unlikely to be triggered on Thursday.

Stock futures recommendation: The composition of the top-10 tradable list remained intact. The ranking of the list had a few changes. Tata Engg moved to the seventh position followed by Ranbaxy and Sterlite Optical.

None of the counters in the tradable list are in the downtrend. For Thursday, the uptrend in Hindustan Petro, Reliance Industries and Satyam Computer is likely to be under threat. Bears are likely to have opportunity in BPCL and Sterlite Optical. Buying opportunities are likely to exist in Reliance Industries and Sterlite Optical.

Selling in Sterlite Optical is likely to the best bet for Thursday's trading. Its sell level is placed very close to its last traded price. Bear pressure on Thursday is likely to initiate the downtrend in the counter.

Cash segment: The top-10 tradable counters in the cash segment underwent a change. Rolta gained entry with the exit of Geometric Soft. The ranking of the list too had some changes. SSIL moved to the fourth position followed by Satyam Computer, VisualSoft and Rolta. The exit level for the uptrend in Geometric Soft is placed at Rs 524.20.

Except one, all the other counters in the tradable list are in the uptrend. Bear domination on Thursday is likely to terminate the uptrend in Aftek Infosys, NIIT, Satyam Computer and SSIL. Traders are left with opportunity on the short side. This is likely to exist in NIIT and Satyam Computer. Between the two, the best is likely to be Satyam Computer. The counter is in the uptrend. Its exit and bearish trigger levels are placed closer to its current level. Bear domination on Thursday is likely to reverse the prevailing uptrend in the 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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