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Saturday, Feb 18, 2006


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Markets - Technical Analysis


Bear domination

K. Premkumar

BEARS Dominated over Friday's trading activity. The sentiment reading of the tradable counters remains bearish. Bull pressure on Monday is likely to change the sentiment reading in their favour. On the contrary, the bearish sentiment is likely to be further strengthened with additional counters.

Nifty futures: The February month contract opened with a bull gap of around 6 points and went up further by 1 point. The February month contract moved with in a range of around 48 points making an intra-day low of 2973. It closed with a loss of around 40 points from its previous close.

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The long position in the February month contract exited and entered a fresh short position in the morning session. The exit and buy levels for the February month contract are placed quite far away from its last traded price. In the normal course of trading, these levels are unlikely to be triggered during Monday's trading.

Stock futures: The composition of the top-10 tradable list had no changes. However, the ranking of the list had minor changes. Tata Motors and Tata Steel interchanged their positions. ONGC and Ranbaxy interchanged their positions. The top-3 tradable counters in this segment were Tata Motors, Reliance and SRF.

Tata Motors is the lone uptrend counter in the top-10 tradable list and it is likely to be under threat for Monday's trading. On the other hand, four downtrend counters are likely to be terminated. There are ample opportunities on the buy side and four opportunities on the sell side. The best for Monday is likely to be selling in Tata Motors. This counter is in up trend. Bear pressure on Monday is likely to reverse the existing trend in this counter.

Cash segment: The Composition of the top-10 tradable list had no changes. However, the ranking of the list had minor changes. ICICI moved down to seventh position and Tata Motors moved up to sixth position.

All the uptrend counters in the top-10 tradable list are likely to be under threat for Monday's trading. On the other hand, two down trend counters are likely to be terminated. There are two opportunities on the buy side and three opportunities on the sell side. The best is likely to be selling in Tata Motors. This counter is in uptrend. Bear pressure on Monday is likely to reverse the existing trend 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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