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Wednesday, Jul 09, 2003

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Initial gains not held

K. Premkumar

BULLS were in control of the initial hours of Tuesday's trading activity. Thereafter, bears took over and recouped their losses. Bulls managed to gain from the day's trading. The sentiment reading of the tradable counters stands bullish. Bear domination on Wednesday is likely to change the sentiment reading in their favour. Otherwise, the prevailing sentiment is likely to continue with a slight change in its value.

Nifty Futures Recommendation: July month contract opened with a bull gap of 3 points and went further by another 4 points. Later on, bears made a strong comeback and recovered their early losses. The July contract moved within a band of 10 points. It closed lower with a loss of 3 points with respect to Monday's close.

The long position in the July contract remains intact.

This is unlikely to be disturbed on Wednesday.

The exit and bearish trigger levels are still placed at a far away level.

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Stock Futures Recommendation: There were no new entries or exits to the top-10 tradable list. The ranking of the list had a few changes. Hindustan Petro moved to the third position and Tata Steel moved to the sixth. The top three traded counters in this segment were Infosys, Satyam Computer and Tata Steel.

None of the counters in the list are in the downtrend. Except for Infosys and Ranbaxy, all the other counters in the list are likely to be safe.

Bulls are unlikely to have any opportunity for Tuesday's trading. Selling opportunities are likely to exist in BPCL, Hindustan Petro and Reliance Industries.

The best bet is likely to be BPCL. This counter is in the sideways mode. Its sell level is placed closer to its last traded price. Bear move on Wednesday is likely to initiate the downtrend in this counter.

Cash Segment: The composition of the top-10 tradable list remains unchanged. The ranking of the list had a minor change. Hindustan Petro and State Bank interchanged their positions. The uptrend in Oriental Bank is likely to be terminated at 161.60.

Bear domination on Wednesday is likely to terminate most of the prevailing uptrend counters in the list. The lone downtrend counter-Punjab National Bank is likely to be safe.

Buying opportunities are unlikely to exist for Wednesday's trading.

Selling opportunities are likely to exist in Hindustan Petro, Mastek and Reliance Industries.

The best among the above is likely to be Hindustan Petro. Its bearish trigger level is placed very close to its current level.

Bear pressure on Wednesday is likely to initiate a fresh 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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