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Saturday, Aug 10, 2002

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Bear run arrested

K. Premkumar

BULLS gained control over Friday's trading activity. Their dominance restricted the bears from making further gains during the day's trading. However, the sentiment reading of the tradable counters remains bearish. Bull domination on Monday is likely to change the sentiment reading strongly in favour of the bulls. Otherwise, the prevailing bearish sentiment is likely to continue.

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Nifty futures recommendation: The near month August contract initially lost 3 points. Thereafter, bulls took over and were in total command of the day's trading. The movement in the August contract was around 18 points. It closed with a gain of 12 points with respect to previous close. Trading activity in August contract was very hectic with more than 7,200 trades.

The downtrend in the August contract remained intact. However, this is likely to be under threat on Monday. Its exit and bullish trigger levels are placed just 3 points away from its last traded value. Bull move on Monday is likely to reverse the prevailing downtrend in the August contract.

Stock futures recommendation: The top-10 tradable counters in this segment remain unchanged. The ranking of the list had some changes. Tata Engg moved to second position and Tata Steel moved to fifth position.

For Monday, the downtrend counters in the list are likely to be under threat. So, traders holding short position will have to be cautious. Bulls are likely to have ample opportunities for Monday's trading. On the other hand, a lone selling opportunity is likely to exist in Satyam Computer.

The best bet is likely to be the buying in Dr Reddy's Lab. Its exit and bullish trigger levels are placed very close to its last traded price. Bull pressure on Monday is likely to trigger these levels.

Cash segment: There were no new entries or exits to the top-10 tradable list. The ranking of the list had a minor change. Infosys and VisualSoft interchanged their positions.

Bull domination on Monday is likely to be a threat to the downtrend counters in the list. The prevailing uptrend counters are likely to be safe. There is unlikely to exist any selling opportunities for Monday. Buying opportunities are likely to exist in all the remaining 8 counters.

The best bet for Monday's trading is likely to be in Digital. The counter is in the downtrend. Its exit and buy levels are placed closer to its current level. Bull move on Monday is likely to reverse the prevailing trend 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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