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Thursday, Sep 30, 2004

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Markets - Technical Analysis


Volatile movement

K. Premkumar

MARKET moved quite violently on Wednesday's trading. The sentiment reading of the tradeable counters stands mildly bearish. Bull domination on Thursday is likely to change the sentiment reading in their favour. On the contrary, the prevailing bearish sentiment is likely to be further strengthened.

Nifty futures recommendation: During the open the September contract gained 23 points. Later, bears dragged down the September contract to a low of 1696.00. Bulls made a strong comeback and took the September contract to register the high of 1733.90 for the day. The September contract closed higher with a strong bullish note.

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Initial move led to the initiation of the uptrend of the September contract. However, the long position was terminated subsequently. The two trades exited with a cumulative loss of around 38 points. Thursday being the expiry day for the September contract, entry levels are given for the October contract. Bullish trigger level is placed just a point above the closing value. Bull move on Thursday is likely to trigger this level.

Stock futures recommendation: The composition of the top-10 tradeable list underwent a change. ACC regained entry with the exit of ONGC. The ranking of the list remains unchanged. The exit level for the downtrend in ACC is placed at 271.60.

Bull domination on Thursday could be threat to the prevailing downtrend counters in the list. On the other hand, the uptrend in CNX IT, ONGC and Reliance are likely to be terminated. Fresh entry levels for all the contracts are given for October contract. Bulls are likely to have opportunity in five counters. Selling opportunities are likely to exist in two counters. Buying in Tata Steel is likely to be the best for Thursday's trading. Buy level for this counter is placed within a rupee from its last traded price. Bull pressure on Thursday is likely to initiate the uptrend in this counter.

Cash segment: There were no new entries or exits to the top-10 tradeable list. The ranking of the list too remains unchanged. Bears were successful in triggering the downtrend in the recommended counter-Tata Steel.

Bull domination on Thursday is likely to terminate the prevailing downtrend counters in the list. On the contrary, the prevailing four uptrend counters are likely to be terminated. Buying opportunities are likely to exist in four counters. Selling opportunities are likely to exist in three counters. Buying in Tata Steel is likely to be the best bet for Thursday's trading. This counter is in the downtrend. The exit and bullish trigger levels for this counter are placed quite closer to its current level. Bull move on Thursday has the potential to reverse the prevailing downtrend in Tata Steel.

(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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