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Friday, Feb 04, 2005

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Markets - Technical Analysis

Bulls regain

K. Premkumar

BULLS regained control of Thursday's trading activity. Their dominance left the bears stranded. The sentiment reading of the tradable counters stands strongly bullish. Bear domination on Friday is likely to reduce the bull count by a considerable margin thereby resulting a change in the sentiment reading.

Nifty futures recommendation: The February contract opened around its previous close and made steady gains during the day's trading. Bears were unable to make any impact during the day's trading. The February contract moved within a band of 39 points registering an intra-day low of 2053.50. It closed higher with a gain of 33 points over Wednesday's close.

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The uptrend in the February contract remains undisturbed. The exit and bearish trigger levels for the February contract are still placed far away. These levels are unlikely to be triggered on Friday.

Stock futures recommendation: There were no new entries to the top-10 tradable list. The ranking of the list underwent a change. Infosys and Tata Motors interchanged their positions. The exit level for the long position in ONGC is placed at Rs 836.05.

Bear domination on Friday could be a threat to most of the uptrend counters in the list. On the contrary, the lone downtrend counter Tata Motors is likely to be terminated.

Bulls are likely to have opportunity in Infosys and Tata Motors. Selling opportunities are likely to exist in the CNX-IT and Infosys.

The best among the above is likely to be the buying in Infosys. Bullish trigger level for this counter is placed very close to its last traded value. Bull pressure on Friday is likely to trigger the uptrend in Infosys.

Cash segment: The composition of the top-10 tradable counters remains intact. The ranking of the list had few changes. State Bank moved to the top slot and SAIL moved to the fourth position.

All the counters in the list are in the uptrend. Bear pressure on Friday is likely to terminate most of the uptrend counters in the list.

For Friday, four opportunities are likely to exist on the short side of trading. The best bet is likely to be Canara Bank.

The exit and sell levels for this counter are placed quite closer to its current level. Bear move on Friday has the potential to reverse the prevailing uptrend in Canara Bank.

(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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