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Saturday, Aug 27, 2005

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Markets - Technical Analysis


Lacklustre movement

K. Premkumar

ON Friday, the sentiment reading of the tradable counters turned mildly bullish. Bull move on Monday is likely to further strengthen the prevailing sentiment. On the contrary, the sentiment reading is likely to turn bearish.

Nifty futures recommendation: September month contract opened around previous day's close and went down by 20 points. Later, bulls took charge of the day's proceedings. The September contract moved within a band of 30 points.

Friday's market action resulted in initiating a fresh long position in the September contract. In the normal course of trading on Monday, the initiated long position is unlikely to be disturbed. Bearish trigger level for the September contract is placed far away from the last traded price.

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Stock futures recommendation: The composition and ranking of the top 10 traded counters had some changes. Bank of India gained entry into the top-10 tradable list with the exit of IPCL. REL and Satyam Computers interchanged their position and State Bank of India moved to sixth position followed by Tata Motors and Bank of India. Top three traded counters were Reliance, TCS and Tata Steel.

All the counters in the list are likely to be under threat for Monday's trading. Ample opportunities exist on both sides for Monday's trading. The best bet is likely to be selling in ICICI Bank. This counter is in sideways mode. Bear pressure on Monday is likely to trigger a fresh downtrend in this counter.

Cash segment: There were no changes to the top 10 tradable list. The ranking of the list had minor changes. Tata Steel and SAIL interchanged their position and ONGC climbed to seventh position.

For Monday, most of the counters in the list are likely to be under threat. Bears are likely to have opportunity in Reliance, Satyam Computers, ONGC and Infosys. Bulls are likely to have opportunity in four counters. For Monday's trading the best counter is likely to be selling in Infosys. This counter is in sideways mode. Bear move on Monday is likely to trigger the downtrend in this counter.

(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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