Financial Daily from THE HINDU group of publications
Friday, Aug 12, 2005
BULLS extended further pressure over Thursday's trading activity. Their supremacy for the second successive trading left the bears stranded.
The sentiment reading of the tradable counters stands strongly bullish with no downtrend counters. Bear move on Friday is likely to reduce the bull count to a bare minimum, thereby, neutralising the sentiment reading.
Nifty futures recommendation: During the open, the near month August contract lost around five points. Thereafter, bulls gained control and made steady gains over the day's trading.
The August contract moved within a band of 29 points registering an intra-day high of 2388.70. It closed with a gain of 13 points with respect to Wednesday's close.
The long position in the August contract remains intact. The position is locked-up with a nominal profit of 5 points. Bear domination on Friday has the potential to terminate the uptrend in the August contract. Bearish trigger level for the August contract is placed far away and this is unlikely to be triggered.
Stock futures recommendation: The composition of the top-10 tradable list had two changes. NTPC and REL gained entry with the exit of Polaris and Ranbaxy. The ranking of the list too had major changes. The exit level for the long position in Polaris and Ranbaxy are placed at 144.90 and 500.95.
Except for REL, all the other counters in the list are in the uptrend. For Friday, most of the counters in the list are likely to be under threat. Bears are likely to have opportunity in five counters.
A lone buying opportunity is likely to exist in REL. Selling in NTPC is likely to be the best bet for Friday's trading. Bear move on Friday has the potential to reverse the prevailing uptrend in REL.
Cash segment: The composition of the top-10 active counters list underwent changes. i-flex and SAIL gained entry with the exit of TCS and Zee Tele. The ranking of the list too had some changes. Reliance moved to the top slot followed by VSNL and Satyam. The uptrend in TCS is likely to terminate at 1306.55.
Bear move on Friday is likely to terminate most of the uptrend counters in the list. Selling opportunities are likely to exist in four counters. Buying opportunities are likely to exist in two counters.
For Friday, the best is likely to be the selling in Infosys. This counter is in the uptrend. The exit and bearish trigger levels for this counter is placed closer to the current level. Bear pressure on Friday is likely to trigger the downtrend in Infosys.
(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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