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Wednesday, Jun 16, 2004

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Markets - Technical Analysis


Bull domination

K. Premkumar

THE sentiment reading of the tradable counters stands mildly bearish. Bull domination on Wednesday is likely to change the sentiment reading in their favour. Otherwise, the prevailing bearish sentiment is likely to be further strengthened.

Nifty futures recommendation: The June contract opened five points lower than its previous close. Bears failed to capitalise on it as they yielded to bull pressure. The June contract moved within a band of 37 points. It closed higher with a gain of 22 points over Monday's close.

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Bull domination during the day led to the termination of the downtrend in the June contract. The short trade exited with a profit of around 17 points. Bullish trigger level for the June contract is now placed closer to its current level. Bull pressure on Wednesday is likely to initiate the uptrend in June contract.

Stock futures recommendation: The composition as well as the ranking of the top-10 tradable list remains unchanged. Most of the counters in the list are in the sideways mode.

Bull domination on Wednesday is likely to terminate the downtrend in CNX IT and Satyam. The lone uptrend counter-Reliance is likely to be safe. Buying opportunities are likely to exist in as much as eight counters. Selling opportunities are likely to exist in two counters. The best bet is likely to be the buying in Tata Motors. This counter is in the sideways mode. Buy level for Tata Motors is placed closer to its last traded price. Bull move on Wednesday is likely to trigger the uptrend in Tata Motors.

Cash segment: There were no new entries or exits to the top-10 tradable list. The ranking of the list had few changes. Tata Motors moved to the fourth position followed by ONGC and State Bank. Bulls were successful in triggering the uptrend in the recommended counter-Reliance.

For Wednesday, the downtrend in GAIL, Infosys and Satyam are likely to be under threat. Bulls are likely to have ample opportunities for Wednesday's trading. A lone selling opportunity is likely to exist in ONGC. Buying in Tata Motors is likely to be the best for Wednesday's trading. Bullish trigger level for this counter is placed within Rs 2 from its closing value. Bull pressure on Wednesday is likely to initiate a fresh uptrend in Tata Motors.

(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 technical analyst and fund management consultant.

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