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Friday, February 09, 2001

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Bulls stage a comeback

K. Premkumar

THE bulls came back to life and dominated the day's proceedings on Thursday. In the process, the downtrend triggered on Wednesday was stopped and reversed. However, the sentiment reading is still not in favour of the new uptrend.

On Friday, a powerful bear move has the potential to whip up the market once again, reversing the current uptrend. However, if the present bull domination were to continue, then traders can expect a sharp reversal in favour of the bulls. If this were to happen, the prevailing bull trend would be strengthened, and could therefore have a better life expectancy. There are lot of buying opportunities for Friday's trading. The best bet among them is ACC.

Index futures recommendation: Wednesday's bear pressure could not be sustained in the futures segment. The bulls, after a minor setback at the start, recouped their entire losses.

Their domination failed to reverse the downtrend in both the target and non-target-based styles of trading. However, it is very likely to happen on Friday, as the levels are very close to the last quoted value.

Scrip recommendation: ITC entered the top-20 list on Thursday with the exit of HCL Tech. There was no major change in the ranking of the list. For traders holding positions in NIIT, the neutral level is placed at Rs 1,556.05.

The sentiment of the tradable list turned bearish on Thursday. This was mainly because of the bearishness in the early hours of trading. The same is likely to continue in case the bears manage to dominate on Friday.

Alternatively, in case of a bull move, the sentiment is likely to become strongly bullish and could give hopes for the continuation of the reinitiated uptrend.

The uptrend in Pentamedia alone is likely to be under threat in case of a bear move on Friday. In case of a bull move, the downtrend in six counters are likely to be under threat - Himachal, Digital, Reliance, Sterlite Optical Tech, MTNL and Infosys. Hen ce, traders holding positions in the above counters will have to keep a close watch on their price movement.

There is unlikely to be any selling opportunities for the bears on Friday. Buying opportunities for the bulls exist in DSQ Software, Digital, Reliance, ACC, Sterlite Optical Tech, Wipro and MTNL.

Among these seven counters, the best is likely to be the buying in ACC. The counter, which is at present in the sideways mode, is likely to trigger the buy level in case of a bull move.

(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 Chennai-based technical analyst and fund management consultant.

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