Financial Daily from THE HINDU group of publications
Wednesday, Dec 04, 2002

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Markets - Technical Analysis

Bear domination

K. Premkumar

BEARS were in control of Tuesday's trading activity thereby ending the continuous bull-run. Tuesday's market action resulted in reducing the bull count by a considerable margin. However, the sentiment reading of the tradable counters continues to remain bullish. Bear domination on Wednesday is likely to change the sentiment reading in its favour. On the other hand, the prevailing sentiment is likely to continue with a slight change in its value.

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Nifty futures recommendation: Initially the near month December contract gained around 5 points. Thereafter bears took over and were in total control of the day's proceedings. The movement in the December contract was around 15 points. It closed with a loss of 9 points with respect to Monday's close.

The exit for the long position in the December contract is locked up at break-even level. Bears were successful in moving the stops closer to the current level. Further bear dominance on Wednesday has the potential to terminate the uptrend in the December contract. Bearish trigger level for the December contract is still placed around the same level.

Stock futures recommendation: There were no new entries or exits to the top-10 tradable list. The ranking of the list had a total revamp. Hindustan Petro moved to the third position followed by Digital and Reliance Industries.

The exit level for the long position in Ranbaxy is placed at Rs 538.95.

Bear domination on Wednesday could be a threat to all the uptrend counters in the tradable list. In case of bull domination, the downtrend in L&T is likely to be terminated.

Bears are likely to have opportunity in BPCL, Hindustan Petro, Infosys and Reliance Industries. A lone buying opportunity is likely to exist in Infosys.

The best among the above is likely to be the selling in Infosys. Its sell level is placed very close to its last traded price. Bear pressure on Wednesday is likely to initiate the downtrend in this counter.

Cash segment: The composition of the top-10 tradable list remains unchanged. However, the ranking of the list underwent some changes. Polaris Soft moved to sixth position and Hindustan Petro to the eighth position.

For Wednesday, the uptrend in Hindustan Petro, Reliance Industries and Wipro is likely to be under threat. The prevailing downtrend counters in the list are likely to be safe.

Selling opportunities are likely to exist in as much as five counters. On the other hand, a lone buying opportunity is likely to exist in Infosys.

The best bet for Wednesday's trading is likely to be the selling in Polaris Soft. Its bearish trigger level is placed closer to its current level. Bear move on Wednesday has the potential 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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