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Friday, Jan 31, 2003

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Initial gains not held

K. Premkumar

BULLS were in control of the initial hours of Thursday's trading activity. During the wee hours of the day's trading, bears made a strong come back to recoup their losses. The market sentiment reading of the tradable counters stands mildly bearish. Bull domination on Friday is likely to change the sentiment reading in its favour. Otherwise, the prevailing sentiment is likely to continue with added strength.

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Nifty futures recommendation: February month contract opened 2 points above the previous close and went further by 8 points. Thereafter, bears made a smart recovery. The movement in the February contract was around 13 points. It closed with a marginal gain of 2 points above previous close.

Bearish trigger level for the February contract is placed quite closer to its current level. Bear domination on Friday has the potential to re-instate the downtrend. Bullish trigger level for the February contract is placed quite far away.

Stock futures recommendation: The top-10 tradable list underwent a change. MTNL gained entry with the exit of Ranbaxy.

Most counters in the list are in the sideways mode. Bull pressure on Friday is likely to terminate the downtrend in Hindustan Petro. Bears are likely to have opportunity in as much as six counters. Buying opportunities are likely to exist in Infosys, MTNL and Tata Engg.

Selling in BPCL is likely to be the best bet for Friday's trading. Its bearish trigger level is placed very close to its last traded price. Bear pressure on Friday is likely to trigger this level.

Cash segment: The composition as well as the ranking of the top-10 tradable list remain intact.

For Thursday, the downtrend in Digital, Hindustan Petro and Infosys is likely to be under threat. The prevailing uptrend counters are likely to be safe. There is unlikely to exist any selling opportunities for Friday's trading. Buying opportunities are likely to exist in Digital and Infosys.

Between the two, the best is likely to be Digital. The counter is in the downtrend. Its exit and buy levels are placed closer to its current level. Bull move on Friday has the potential to reverse the prevailing 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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