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Markets - Technical Analysis


Bear-run arrested

K. Premkumar

THE sentiment reading of the tradable counters remains bearish.

Bull domination on Monday 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: During the morning session of Friday's trading, the near month February contract slipped by 20 points. Later on, bulls made a strong comeback and recouped their losses.

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February contract registered an intra-day high of 1872.60 after making a low of 1834.10. It closed with a gain of 10 points with respect to the previous close.

The short position in the February contract remained intact. The position is now locked-up with a decent profit of 17 points. In the normal course of trading on Monday, the downtrend is unlikely to be disturbed. However, bull domination on Monday has the potential to terminate the downtrend. Bullish trigger level for the February contract is placed quite far away from its last traded value.

Stock futures recommendation: The top-10 tradable list in this segment remains unchanged. The ranking of the list had few changes. Tata Motors moved to the top slot and Reliance to the seventh position.

Bears were successful in reversing the uptrend in the recommended counter-Tata Steel.

Except for M&M and Maruti, all the other counters in the list are in the downtrend. Bull domination on Monday could be a threat to the prevailing downtrend counters in the list. The prevailing uptrend counters are likely to be safe. Selling opportunities are unlikely to exist for Monday's trading. Buying opportunities are likely to exist in ACC, Reliance, Tata Motors and Tata Steel. The best among the above is likely to be Tata Steel. This counter is in the downtrend. It has closed at 445.00. Bulls have the potential to reverse the uptrend in this counter.

Cash segment: The composition as well as the ranking of the top-10 tradable list remains undisturbed. Friday's market action resulted in triggering the downtrend in the recommended counter-GAIL. However, the exit level for the initiated short position is in the danger zone. The downtrend in ACC is likely to terminate at 263.55.

Bull domination on Monday is likely to terminate most of the downtrend counters in the list. The uptrend counters in the list are likely to be safe. Bears are unlikely to have any opportunity for Monday's trading. Buying opportunities are likely to exist in Tata Motors and Tata Steel.

Between the two, the best bet is likely to be Tata Motors. This counter is in the downtrend. Its exit and bullish trigger levels are placed closer to its current level.

Bull move on Monday has the potential to reverse the prevailing 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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