Financial Daily from THE HINDU group of publications
Wednesday, Apr 17, 2002

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Markets - Technical Analysis

Bears march ahead

K. Premkumar

BEARS were in total command of Tuesday's trading activity. Their dominance for the second successive trading day left the bulls with no opportunity to recover. However, the market sentiment reading of the tradable counters stands neutral. Irrespective of bull or bear domination on Wednesday, the prevailing sentiment is likely to continue. Thus indicating a strong undercurrent in favour of the sideways movement.

Nifty futures recommendation: The near month April contract opened with a bear gap of 3 points and went further down by another 6 points. Bulls were unable to make any recovery during the day's trading. The April contract moved within a band of 11 points. It closed with a loss of 7 points with respect to previous close.

Bear domination during the day led to the initiation of downtrend in the April contract. In the normal course of trading on Wednesday, the downtrend is likely to continue. However, bull domination on Wednesday has the potential to terminate the downtrend. Bullish trigger level is still placed far away and this is unlikely to be triggered on Wednesday.

Stock futures recommendation: The composition and the ranking of the top-10 tradable counters remained undisturbed. Satyam Computer continues to dominate the trading activity in this segment followed by Digital and Infosys.

Bear domination on Wednesday is likely to terminate the uptrend in State Bank and Tata Engg. On the contrary, the downtrend in Hindustan Petro, MTNL and Reliance Industries is likely to be under threat. So, traders holding positions in the above counters will have to closely monitor their price movements. For Wednesday, a lone opportunity is likely to exist on the long side of Infosys. The counter is in the sideways trend. Bull move on Wednesday has the potential to initiate a fresh uptrend in the counter.

Cash segment: The top-10 tradable counters in this segment underwent a change. Global Tele gained entry with the exit of Wipro. The ranking of the list too had a few changes. Infosys moved to the second position and Aftek Infosys to the sixth position followed by Global Tele and Mastek.

Most counters in the list are in the sideways trend. The prevailing uptrend counters in the list are likely to be safe. Bull domination on Wednesday could be a threat to the lone downtrend counter — Aftek Infosys. Bears are likely to have a lone opportunity in ONGC. Buying opportunities are likely to exist in Infosys and Zee Tele. Selling in ONGC is likely to be the best bet for Wednesday's trading. The same counter was recommended for Tuesday's trading. Bears failed to initiate the downtrend. Its sell level is now placed very close to its last traded price. Bear pressure on Wednesday is likely to trigger this level.

(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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