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Wednesday, July 18, 2001

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Nifty turns sideways

K. Premkumar

THE market witnessed almost an equal participation by the bulls and the bears. Initial bear domination led to the termination of the uptrend in the index. The movement in the index was around 14 points. It closed with a marginal loss of three points with respect to Monday's close. The market sentiment reading changed to bearish.

For Wednesday, bulls have the potential to reinstate their position. Since, the bullish trigger level is placed closer to its last traded value. The prevailing bearish sentiment is likely to continue on Wednesday with a slight change in its value.

Index futures recommendation: Initial hours of trading in the futures segment was dominated by the bears. This led to the initiation of a fresh downtrend, terminating the uptrend in both the styles of trading. During the close, the bulls managed to recov er their losses.

The movement in the nearby July contract was within a close band of nine points. It closed with a loss of two points with respect to Monday's close.

Bull domination on Wednesday is likely to terminate the newly-initiated downtrend in both the target and non-target-based style of trading.

The exit level is placed at 1103.75, which is very close to its current level.

Scrip recommendation: The composition of the top-20 tradable counters remained intact. The ranking of the list remained the same with no major changes.

The market sentiment reading of the tradable counters changed to bearish. The sentiment is likely to remain the same irrespective of a bull or bear move on Wednesday.

In case of a bull move the downtrends in HCL Tech, Reliance Industries and VSNL are likely to be under threat. Bear domination could be a threat to the uptrend in Global Tele. So, traders holding positions in these counters will have to be careful during Wednesday's trading.

For Wednesday's trading, traders are left with a lone opportunity. It is likely to exist on the long side in ACC. The counter at present is in the sideways mode. Its buy level is placed quite closer to its last traded value. Bull move on Wednesday has th e potential to initiate a fresh uptrend 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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