Financial Daily from THE HINDU group of publications
Friday, May 24, 2002

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Markets - Technical Analysis

Bears march ahead

K. Premkumar

BEARS exerted further pressure on Thursday's trading. Bulls were unable to make any impact during the day's trading. Nifty continues to be on the downside, losing for the eighth successive trading day. The market sentiment reading of the tradable counters stands bearish. Irrespective of bull or bear domination on Friday, the prevailing sentiment is likely to continue.

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Nifty futures recommendation: The May contract opened one point above the previous close and gained another 3 points. Later on, bears took over and were in total control of the day's proceedings. The intra-day movement in the May contract was around 19 points. It closed lower with a loss of around 14 points with respect to Wednesday's close.

The short position in the May contract is unlikely to be disturbed on Friday since its exit and bullish trigger levels are still placed far away from its current level.

Stock futures recommendation: The top-10 tradable counters remained unchanged. The ranking of the list had some changes. BPCL moved to the third position followed by Digital and Infosys. For those still holding short position in Ranbaxy, the stop loss is placed at Rs 865.05.

Except for two counters, all the other counters in the tradable list are in the downtrend. Bull domination on Friday could be a threat to the downtrend in Infosys, L&T and Reliance Industries. Buying opportunities are unlikely to exist for Friday's trading.

Selling opportunities are likely to exist in ACC and BPCL. Between the two, the best is likely to be in BPCL. Its bearish trigger level is placed closer to its last traded price. Bear pressure on Friday is likely to initiate the downtrend in the counter.

Cash segment: The composition of the top-10 tradable counters in the cash segment remained intact. However, the ranking of the list underwent a few changes. Polaris Soft moved to the second position followed by GTL, Satyam Computer, Digital, and NIIT. The exit level for the short position in SSIL is placed at Rs 161.55.

Further bear pressure on Friday is likely to terminate both the uptrend counters — Polaris and Rolta. The prevailing downtrend counters in the list are likely to be safe.

Bear pressure prevailing in the market has placed the buy levels for the counters quite far away from its current level. So, traders are left with a lone opportunity on the short side of NIIT. Its sell level is placed closer to its last quoted price. Bear move on Friday 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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