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Tuesday, Dec 14, 2004

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Markets - Technical Analysis


Bulls dominance

K. Premkumar

BULLS gained control of Monday's trading activity. The sentiment reading of the tradable counters stands bullish. Bear domination on Tuesday is likely to reduce the bull count by a considerable margin, thereby changing the sentiment reading in their favour.

Nifty futures: During the open, the near month December contract lost five points. Bears failed to capitalize on it, as they yielded to bull pressure. The December contract moved within a band of 24 points. It closed with a gain of around 15 points with respect to Friday's close.

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Monday's market action had no impact on the recommended levels. In the normal course of trading on Tuesday, the sideways trend is likely to continue. Both bullish and bearish entry levels for the December contract are placed slightly away from its last traded value.

Stock futures: The composition as well as the ranking of the top-10 tradable list remain unchanged. Bear domination on Tuesday could be a threat to most of the uptrend counters. On the contrary, the downtrend in ONGC and Reliance is likely to be under threat. Five opportunities are likely to exist on either side of trading.

Buying in Ranbaxy is likely to be the best bet for Tuesday's trading. This counter is in the sideways mode. Bullish trigger level for this counter is placed just a rupee above its last traded value. Bull pressure on Tuesday is likely to trigger the uptrend in Ranbaxy.

Cash Segment: There were no new entries or exits to the top-10 tradable list. The ranking of the list had some changes. State Bank moved to the second position followed by Maruti and Satyam. Except for the downtrend in Reliance, all the other counters in the list are likely to be under threat. Bears are likely to have opportunity in five counters. Buying opportunities are likely to exist in four counters. Selling in Satyam is likely to be the best bet for Tuesday's trading. This counter is in the sideways mode. The bear move on Tuesday is likely to initiate the downtrend in Satyam.

(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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