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Uptrend initiated

K. Premkumar

THURSDAY'S bull domination initiated a fresh uptrend, terminating the downtrend in the index. The intra-day movement in the index was restricted to 11 points. It closed with a marginal gain of three points with respect to Tuesday's close. The sentimen t reading of the tradable counters stands in favour of the bulls.

In the normal course of trading, the uptrend initiated on Thursday is likely to continue on Friday. However, strong bear domination has the potential to reverse the uptrend in the index. Bull domination on Friday would further strengthen the prevailin g sentiment. Else, it is likely to remain the same.

Index futures recommendation: Thursday's trading in the futures segment witnessed a narrow movement. The nearby August contract moved within a band of seven points. Bulls managed to gain from the day's trading. The August contract closed with a gain of f ive points with respect to Tuesday's close.

The range-bound movement had no impact on the recommended levels. The uptrend in both the target and non-target based style of trading remained intact. However, the long position in both the styles of trading are still in danger zone. Bear domination on Friday would be a threat to the prevailing uptrend.

Scrip recommendation: There were no new entries or exits to the top-20 tradable list. The ranking of the top-10 list underwent a few changes. Satyam Computer moved to the top slot followed by Digital.

The market sentiment reading of the tradable counters stands bullish after Thursday's trading. Irrespective of a bull or bear domination on Friday, the prevailing sentiment is likely to continue with a slight change in its value.

Bear domination on Friday could be a threat to the uptrend in ACC. Similarly, bull domination could be a threat to the downtrend in Reliance Industries. Traders holding positions in the above two counters will have to keep a close watch on their price movements.

Traders are left with limited opportunities for Friday's trading. Buying opportunities for the bulls are likely to exist in Ranbaxy and Silverline Industries. A lone selling opportunity for the bears is likely to exist in ACC. The best among the above counters is likely to be the buying in Ranbaxy. This counter is at present in the sideways mode. The last traded value of this counter is very close to its buy level.

Hence a bull move on Friday is likely to trigger 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.