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Friday, Nov 17, 2006

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Markets - Technical Analysis
Sideways movement

K. Premkumar

Trading activity witnessed sideways movement on Thursday. However, the sentiment reading of the tradable counters remains bullish with some added strength. Bear move on Friday is likely to neutralise the sentiment reading. On the contrary, the prevailing bullish sentiment is likely to be further strengthened.

Nifty Futures

The November month contract opened with a bull gap of around four points from its previous close. It moved within a range of around 32 points making an intra-day high of 3,898. The November month contract closed with a loss of around three points from its previous close.

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The contract entered a new long position. The long exit and short entry levels are placed quite nearer to its last traded price. In the normal course of trading during Friday, these levels are likely to be triggered.

Stock futures

The composition and ranking of the top-10 tradable counters had minor changes. Hindustan Lever gave way to ACC. ACC occupied ninth position in the ranking. SBIN and ONGC interchanged their positions. Tata Motors moved down in the ranking and occupied tenth position. Tata Steel and Reliance Capital interchanged their positions. The top-3 tradable counters in this segment were SBIN, ICICI and Tata Steel. There are six uptrend and three downtrend counters in the top-10 tradable list. All the downtrend counters are likely to be terminated during Friday's trading. On the contrary, the uptrend counters Century Tex and Reliance Capital are likely to be under threat for Friday's trading. There are four buying opportunities and three selling opportunities for Friday's trading. The best bet is likely to be selling in Tata Steel. Bear move on Thursday has a potential to trigger the short level in this counter.

Cash segment

The composition and ranking of the top-10 tradable list had some changes. ACC and Tata Steel have entered into the top-10 tradable lists pushing out Infosys and Reliance Capital. State Bank came to first slot followed by Reliance and ONGC. The exit levels for Suzlon, Infosys and Reliance Capital are placed at 1377.45, 2215.05 and 574.95, respectively.

All the downtrend counters in the list are under threat. For Friday's trading selling opportunity exist in Tata Steel and Zee Tele. There are six opportunities on the buying side. The best is likely to be selling in Tata Steel. This counter is in sideways trend. Bear move on Friday is likely to initiate a fresh 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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