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Thursday, Jun 22, 2006

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Markets - Technical Analysis

Bull domination

K. Premkumar

Bulls Dominated over Wednesday's trading activity. The sentiment reading of the tradable counters remains bullish. Bear domination on Thursday is likely to change the sentiment reading in their favour. On the contrary, the prevailing bullish sentiment is likely to be further strengthened.

Nifty futures

The June month contract opened with a bear gap of around 39 points. However, bulls could not capitalise on their initial momentum and gave way to bulls. The June month contract moved with in a range of around 125 points. It closed with a loss of around 72 points from its previous close.

The long position in the June month contract remains intact. The long exit level is placed with a locked profit of around 47 points. The short entry level is placed quite far away from its last traded price. In the normal course of trading, both the levels are unlikely to be triggered during Thursday's trading.

Stock futures

The composition of the top-10 tradable list had no changes. However, the ranking of the list had minor changes. BHEL and Maruti interchanged their positions. The top-3 tradable counters in this segment were Reliance, Rel capital and IPCL.

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Except ACC which is in side position all other counters in the top-10 tradable list are likely to be under threat for Thursday's trading. There are three opportunities on the buy side and two opportunities on the sell side for Thursday's trading. The best is likely to be buying in Bajaj Auto. This counter is in down trend. Bull move on Thursday is likely to trigger the uptrend in this counter.

Cash segment

The composition and the ranking of the top-10 tradable had minor changes. SAIL moved out of the list and gave way to Tata Motors. ONGC and L&T interchanged their positions.

All the uptrend counters in the top-10 tradable list are likely to be under threat for Thursday'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 Infosys. This counter is in up trend. Bear domination on Thursday 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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