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Wednesday, Oct 04, 2006

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Markets - Technical Analysis
Bear domination

K. Premkumar

Bears dominated Tuesday's trading activity. However, the sentiment reading of the tradable counters remains marginally bullish. Bear move on Wednesday is likely to change the sentiment reading in their favour.

On the other hand, the prevailing bullish sentiment is likely to be further strengthened with additional counters.


The October month contract opened with a bull gap of around 4 points from its previous close. The October month contract moved with in a range of around 43 points making an intra-day low of 3,561. It closed with a loss of around 21 points from its previous close.

The long position in the October month contract exited and entered short. The short exit and long entry levels are placed far away from its last traded price. These levels are unlikely to be triggered during trading on Wednesday.


The composition and ranking of the top-10 tradable counters had minor changes. SBI gave way to Jet Airways. Jet Airways occupied the seventh position. ACC moved up in the ranking and occupied third position while Infosys, Reliance Industries, Tata Steel, Satyam and Tata Motors moved down.

The top-3 tradable counters in this segment were Tata Steel, Sterlite and SBI. The exit level for SBIN is placed at 1,029.95.

Click here for table

There are five uptrend and five downtrend counters in the top-10 tradable list. All the counters are likely to be under threat for Wednesday's trading. There are ample opportunities on either side for Wednesday's trading.

The best is likely to be selling in Maruti. This counter is in uptrend. Bear move on Wednesday is likely to trigger the downtrend in this counter.


The composition and the ranking of the top-10 tradable list had no changes. Most of the counters in the list are in uptrend. All the uptrend counters are likely to be under threat for Wednesday's trading.

On the other hand, downtrend counters Reliance Industries and i-flex are likely to be terminated. There are ample selling opportunities and two buying opportunities for Wednesday's trading.

The best is likely to be buying in i-flex. This counter is in downtrend. Bull move on Wednesday 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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