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Wednesday, June 13, 2001

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Indecisive movement

K. Premkumar

THE market remained indecisive throughout Tuesday's trading. The Nifty moved within a close band of 12 points. Both the bulls and bears could not gain much from the day's trading. The Nifty closed with a marginal loss of four points with respect to Monda y's close. The market trend continued to be in the sideways direction. The sentiment remained bearish.

A fresh downtrend is likely to be initiated in the index on Wednesday. Since the sell trigger level is placed quite closer to its last traded value, the bullish trigger level still remains around the same level and is unlikely to be triggered. The prevai ling bearish sentiment in the market is likely to continue irrespective of a bull or bear move.

Index Futures Recommendation: The day's trading in the futures segment witnessed narrow movement. The nearby June futures contract moved within a close band of 10 points. It closed with a loss of 3 points with respect to Monday's close. The trend in both the target and non-target-based style of trading remained sideways.

The day's rangebound movement left both the buy and sell trigger levels unchanged. The sell trigger levels in both the styles of trading are placed closer to its current level. Hence, bear pressure on Wednesday has the potential to initiate a fresh downt rend in both the styles of trading.

Scrip Recommendation: There was a slight change in the top-20 list. VSNL regained entry with the exit of State Bank of India. However, the ranking of the list remains the same. For those holding positions in DSQ Biotech and State Bank of India, the stop loss-is placed at 43.75 and 226.25 respectively.

The trading sentiment of the tradable list continued to be strongly bearish. The same is likely to continue irrespective of a bull or bear move on Wednesday with a slight change in its value.

There is unlikely to be any threat for the existing uptrend counters. In case of a bull move, the downtrend in Global Tele, Reliance Industries, Tata Steel and Zee Tele are likely to be under threat. Hence, traders holding positions in these counters wil l have to closely monitor their price movements.

A lone selling opportunity by way of L&T exists for the bears on Wednesday. Buying opportunities for the bulls exist in Global Tele and Zee Tele.

The best among the above is likely to be the selling in L&T. Currently, this counter is in the sideways trend. Its sell trigger level is placed closer to its last traded value. Hence, bear pressure on Wednesday has the potential to initiate a fresh downt rend 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 Chennai-based technical analyst and fund management consultant.

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