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Saturday, Jun 19, 2004

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Markets - Technical Analysis


Bears hold sway

K. Premkumar

THE sentiment reading of the tradable counters stands bullish. Bear domination on Monday is likely to reduce the bull count to a bare minimum, thereby changing the sentiment reading in their favour. On the contrary, the prevailing bullish sentiment is likely to be further strengthened.

Nifty futures recommendation: The June contract opened with a bear gap of six points and thereafter lost around 33 points. During the close, bulls managed to make a partial recovery. The June contract closed with a loss of 29 points with respect to Thursday's close.

The sideways trend in the June contract remained intact. Bearish trigger level for the June contract is now placed closer to its current level. Bear pressure on Monday is likely to initiate the downtrend in the June contract. Bullish trigger level for the June contract is placed slightly away.

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Stock futures recommendation: There were no new entries or exits to the top 10 tradable list. Satyam, Tata Steel and Reliance were the top three traded counters in this segment.

Bear domination on Monday is likely to terminate most of the uptrend counters in the list. On the other hand, the downtrend in Tata Steel is likely to be under threat.

Selling opportunities are likely to exist in six counters. A lone buying opportunity is likely to exist in Reliance.

The best bet is likely to be the selling in Reliance. This counter is in the sideways mode. Bearish trigger level is placed quite closer to its last traded value. Bear move on Monday is likely to trigger the downtrend in Reliance.

Cash segment: The composition as well as the ranking of the top 10 tradable list remains unchanged. Friday's market action had no impact on the recommended counter - Reliance.

The prevailing uptrend counters in the list are likely to be under threat. The downtrend counters in the list are likely to be safe. Bears are likely to have opportunity in six counters.

Buying opportunities are likely to exist in two counters. Selling in GAIL is likely to be the best for Friday's trading. Sell level for GAIL is placed within two rupees from its current level. Bear pressure on Monday is likely to initiate a fresh downtrend in GAIL.

(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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