The Hindu Business Line : Bull onslaught

BULLS were in total command of Wednesday's trading activity. The sentiment reading of the tradable counters stands extremely bullish. Bear domination on Thursday is likely to reduce the bull count by a considerable margin, thereby, changing the sentiment reading to bearish.

Nifty futures recommendation: The near month December contract opened with a bull gap of three points and went further by another 21 points. Bears were unable to make any impact for the second successive trading day. The December contract moved within a band of 22 points. It closed with a gain of 19 points over Tuesday's close.

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The long position in the December contract remains intact. The position is locked up with a nominal profit. In the normal course of trading on Thursday, the long position is likely to continue. However, bear domination on Thursday has the potential to terminate the uptrend. Bearish trigger level for the December contract is still placed far away.

Stock futures recommendation: The composition of the top-10 active counters and their ranking remains intact. The top three traded counters in this segment were NTPC, Reliance and Tata Steel.

For Thursday, the prevailing uptrend counters in the list are likely to be under threat. None of the counters in the list are in the downtrend. Bears are likely to have opportunity in as much as eight counters. Buying opportunities are likely to exist in two counters. Selling in Reliance is likely to be the best bet for Thursday's trading. Bearish trigger level for this counter is placed closer to its last traded value. Bear pressure on Thursday is likely to trigger the downtrend in Reliance.

Cash segment: There were no new entries or exits to the top-10 tradable list. The ranking of the list too remains intact. Bulls were successful in triggering the uptrend in the recommended counter — Tata Motors.

Except for Reliance, all the other counters in the list are in the uptrend. Bear move on Thursday is likely to terminate most of the uptrend counters in the list.

On the other hand, the lone downtrend counter — Reliance is likely to be under threat. Traders are left with opportunities on the short side for Thursday's trading.

The best bet is likely to be the selling in ONGC. This counter is in the uptrend. The exit and sell levels are placed quite closer to its current level. Bear domination on Thursday has the potential to reverse the prevailing uptrend in ONGC.

(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 technical analyst and fund management consultant.