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Thursday, Jul 01, 2004

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Markets - Technical Analysis


Bears prevail

K. Premkumar

THE sentiment reading of the tradable counters remains strongly bullish.

Bear pressure on Thursday 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.

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Nifty futures recommendation: The July contract opened four points above its previous close. Bulls failed to capitalise on it as they succumbed to bear pressure.

The July contract moved within a band of 32 points registering an intra-day low of 1480.30. It closed with a loss of 12 points with respect to Tuesday's close.

Bears were successful in terminating the long position in the July contract. The long trade exited with a profit of 20 points. Bearish trigger level is placed quite closer to its current level. Bear pressure on Thursday is likely to initiate a fresh downtrend in the July contract.

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

Except for Punjab Bank, all the other uptrend counters in the list are likely to be under threat. Bears are likely to have ample opportunities for Thursday's trading. A lone buying opportunity is likely to exist in ONGC. Selling in ONGC is likely to be the best bet for Thursday's trading. Sell level for this counter is placed quite closer to its current level. Bear move on Thursday has the potential to trigger the downtrend in this counter.

Cash segment: The composition of the top-10 tradable list in this segment remains unchanged. Ranking of the list had some minor changes. Tata Power and Infosys inter-changed their position.

Bear domination on Thursday is likely to terminate most of the uptrend counters in the list. On the other hand, the downtrend in Satyam is likely to be under threat. Selling opportunities are likely to exist in SBI, Tata Motor, ONGC, Tata Power and Canara Bank. Buying opportunity is likely to exist in ONGC. The best among the above is likely to be the selling in ONGC. Bearish trigger level for this counter is placed within a rupee from its last traded price. Bear pressure on Thursday is likely to initiate a fresh downtrend in ONGC.

(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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