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Thursday, Mar 03, 2005

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Markets - Technical Analysis

Sideways movement

K. Premkumar

WEDNESDAY'S trading activity witnessed a range bound movement. Neither bulls nor bears could gain much from the day's trading. The sentiment reading of the tradable counters remains mildly bullish.

Bear domination on Thursday has the potential to change the sentiment reading in their favour. On the contrary, the prevailing sentiment reading is likely to be strengthened.

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Nifty futures recommendation: The March contract opened 3 points above its previous close and subsequently lost 5 points. During the fag end of the day's trading, bulls gained their momentum. The March contract moved within a close band of 15 points registering an intra-day high of 2095.00 after making a low of 2080.00. It closed with a gain of 9 points over Tuesday's close.

The uptrend in the March contract remains intact. The exit level is now placed at break even level. In the normal course of trading on Thursday, the long position is likely to continue. Bearish trigger level for the March contract has been moved closer.

Stock futures recommendation: The composition as well as the ranking of the top-10 list in this segment remains undisturbed. Most of the counters in the list are in sideways mode. Bear move on Thursday is likely to terminate the prevailing uptrend counters.

On the other hand the downtrend in CNXIT and Maruti is likely to be under threat. Selling opportunities are likely to exist in as mush as seven counters. Buying opportunities are likely to exist in six counters. For Thursday, the best is likely to be the buying in ACC. Bullish trigger level for this counter is placed closer to the last traded value. Bull pressure on Thursday is likely to trigger the uptrend in ACC.

Cash segment: The composition of the list had a minor change. ONGC gained entry with the exit of Tata Motors. Infosys moved to the second position and Tata Tele to the fifth position.

Bear pressure on Thursday could be a threat to most of the uptrend counters in the list. On the contrary, the downtrend in Infosys, Maruti and Satyam are likely to be under threat. For Thursday, four opportunities are likely to exist in either side of trading. Selling in Reliance Industries is likely to be the best bet for Thursday's trading. This counter is in uptrend. The exit and sell levels for this counter is placed quite closer to the current level. Bear move on Thursday has the potential to reverse the prevailing uptrend in Reliance Industries.

(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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