Financial Daily from THE HINDU group of publications
Thursday, Nov 13, 2003

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Markets - Technical Analysis

Initial gains not held


BULLS exerted pressure during the initial hours of Wednesday's trading. Bears made a strong comeback during the wee hours of the day's trading. Wednesday's market action resulted in terminating the uptrend in a few counters in the tradable list.

The market sentiment reading of the tradable counters stands bullish. Bear domination on Thursday is likely to change the sentiment reading in their favour. Otherwise, the prevailing bullish sentiment reading is likely be further strengthened.

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Nifty futures recommendation: During the initial hours of trading, the November month contract moved by 16 points. Thereafter, bears made a strong comeback and wiped out their losses. The November contract moved within a band of 19 points. It closed with a marginal loss of 2 points with respect to Tuesday's close.

Initial bull move led to the initiation of the uptrend in the November contract. However, the long position is very likely to be terminated as its exit level is placed around its closing value. Bearish trigger level for the November contract is still placed far away.

Stock futures recommendation: There were no new entries or exits to the top-10 tradable list. Maruti moved to the fourth position followed by Reliance Industries and State Bank. Trading activity in IOC was quite impressive on Wednesday with more than 5900 trades.

None of the counters in the list is in the downtrend. Bear domination on Thursday could be a threat to the prevailing uptrend counters in the tradable list. Selling opportunities are likely to exist in ACC, Maruti, State Bank and Tata Power. Buying opportunities are likely to exist in State Bank, Tata Power and Tata Steel.

The best among the above is likely to be the selling in Tata Power. Its bearish trigger level is placed very close to its current level. Bear pressure on Thursday is likely to trigger this level.

Cash segment: The composition of the top-10 tradable list in this segment remains unchanged. The ranking of the list too remains the same with no major changes.

Except for the downtrend in SAIL, all the other counters in the list are likely to be under threat. Bears are likely to have opportunity in Punjab National Bank, Reliance Industries and Tata Engg. Buying opportunities are likely to exist in Digital, Infosys and Punjab Bank.

Selling in PNB is likely to be the best for Thursday's trading. Its sell level is placed very close to its last traded price. Bear move on Thursday is likely to initiate the downtrend in the 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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