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K. Premkumar

BEARS were in total control of Thursday's trading activity. Their dominance left the bulls with no opportunity to recover. Bears gained substantially from the day's trading. The sentiment reading of the tradable counters stands bearish. Bull domination on Friday is likely to neutralise the prevailing sentiment reading. On the contrary, the bearish sentiment is likely to continue with added strength.

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Nifty futures recommendation: August contract opened 2 points higher than previous close but could make no further gains. Bears were in total control of the day's proceedings. The intra-day movement in the August contract was around 21 points. It closed lower with a loss of 17 points with respect to Wednesday's close.

Bear domination during the day led to the reversal of the uptrend in August contract. The long trade exited at break-even level. In the normal course of trading on Friday, the initiated downtrend is likely to continue. However, strong bull move has the potential to terminate the downtrend. Re-entry level on the long side for the August contract is placed very far away from its current level.

Stock futures recommendation: There were no new entries or exits to the top-10 tradable list. Infosys moved to second position followed by Tata Engg. Satyam Computer continues to dominate the trading activity in this segment followed by Reliance Industries and Infosys.

Bull domination on Friday could be a threat to the downtrend in BPCL, Dr. Reddy's Lab and Infosys. On the other hand, the lone uptrend counter Hindustan Petro is likely to be under threat.

Selling opportunities are likely to exist in Satyam Computer and Tata Steel. Buying opportunities are likely to exist in Dr. Reddy's Lab and Infosys. The best among them is likely to be the selling in Satyam Computer. Its sell level is placed very close to its last traded price. Bear pressure on Friday is likely to trigger this level.

Cash segment: The composition of the top-10 tradable counters in this segment remains undisturbed. However, the ranking of the list had some changes. Aftek Infosys moved to fifth position followed by Hinduja TMT and Digital.

For Friday, the uptrend in Aftek Infosys and the downtrend in Infosys are likely to be under threat. So, traders holding positions in the above two counters will have to closely monitor their price movements.

Bears are likely to have opportunity in Aftek Infosys, Digital, Hinduja TMT, Mastek, NIIT, Polaris Soft and VisualSoft. A lone buying opportunity is likely to exist in Infosys.

The best bet for Friday's trading is likely to be the selling in Digital. Its bearish trigger level is placed quite closer to its current level. Bear move on Friday is likely to initiate the downtrend 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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