The Hindu Business Line : Initial gains not held

BULLS were in control of the initial hours of Thursday's trading activity. The day's market action resulted in reducing the bear count by a considerable margin. The sentiment reading of the tradable counters stands neutral. Bull pressure on Friday is likely to change the sentiment reading in their favour. On the other hand, the sentiment reading is likely to turn bearish.

Nifty futures recommendation: During the initial hour of Thursday's trading, the May month contract gained around 22 points. Bulls failed to capitalise on it as they yielded to bear pressure. The May month contract moved within a band of 18 points registering an intra-day low of 1975. It closed with a gain of six points over the previous close.

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Bulls were successful to the extent of terminating the downtrend in the May contract. The short trade exited with a loss of 12 points. Bullish and bearish entry level for the May contract are placed slightly away from the current level. In the normal course of trading on Friday, these levels are unlikely to be triggered.

Stock futures recommendation: The composition of the top-10 active counters list remains unchanged. The ranking of the list had some changes. Tata Motors moved to the fourth position and Arvind Mills moved to the seventh position. Those still holding short position in Bank of India may do so with the stop-loss placed at 97.40.

Bear domination on Friday is likely to terminate the prevailing uptrend counters in the list. On the contrary, the downtrend in Bank of Baroda and Reliance are likely to be under threat. Selling opportunities are likely to exist in five counters. Buying opportunities are likely to exist in seven counters. For Friday, the best bet is likely to be the selling in Tata Motors. This counter is in the sideways mode. Sell level for this counter is placed quite closer to the last traded value. Bear move on Friday is likely to trigger the downtrend in Tata Motors.

Cash segment: There were no new entries or exits to the top-10 tradable counters list. The ranking of the list had few changes. State Bank moved to the fourth position and Oriental Bank to the seventh position.

For Friday, most of the counters in the list are likely to be under threat. Bears are likely to have opportunity in five counters. Buying opportunities are likely to exist in seven counters. Selling in Tata Motors is likely to be the best for Friday's trading. Bearish trigger level for this counter is placed within a rupee from the closing price. Bear pressure on Friday is likely to initiate a fresh downtrend in Tata Motors.

(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.

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