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Friday, Apr 09, 2004

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Markets - Technical Analysis


Volatile movement

K. Premkumar

THE sentiment reading of the tradeable counters continues to remain bullish. Bear domination on Monday is likely to change the sentiment reading in their favour. Otherwise, the prevailing bullish sentiment is likely to continue with added strength.

Nifty futures recommendation: During the initial hours of the day's trading, the April contract lost around 10 points. Later on bulls gained control of the day's trading. The April contract moved within a band of 29 points. It closed with a gain of 13 points.

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The long position in the April contract remains undisturbed. The position is now locked-up with a profit of 67 points. Bearish trigger level for the April contract is still placed far away. Bear domination on Monday is likely to terminate the uptrend in the April contract.

Stock futures recommendation: The composition as well as the ranking of the top-10 tradeable list remains intact. Trading activity in ICICI Bank was quite hectic with more than 4,300 trades. The long position in Maruti may be held with the stop loss placed at 512.10.

Bear pressure on Monday could be a threat to the uptrend in CNX IT and Infosys. On the contrary, the lone downtrend counter — Tata Steel is likely to be terminated. Bulls are likely to have opportunity in Reliance, Satyam, State Bank and Tata Steel. Selling opportunities are likely to exist in CNX IT, Infosys, Satyam and State Bank. Buying in Tata Steel is likely to be the best bet for Monday's trading. This counter is in the downtrend. Its exit and bullish trigger levels are placed closer to its current level. Bull pressure on Monday has the potential to trigger these levels.

Cash segment: There were no new entries or exits to the top-10 tradeable list. The ranking of the list had some changes. Maruti moved to the third position followed by ONGC and Reliance. The day's market action had no impact on the recommended counter-Infosys.

Bear domination on Monday is likely to terminate the uptrend in Infosys and Tata Motors. On the other hand, the downtrend in Tata Steel is likely to be terminated. Selling opportunities are likely to exist in five counters. Buying opportunities are likely to exist in four counters. Selling in Infosys is likely to be the best for Monday's trading. This counter is in the uptrend. Its exit and buy levels are placed closer to its last traded value. Bear domination on Monday is likely to reverse the prevailing uptrend 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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