The Hindu Business Line : Bull onslaught

BULLS were in total command of Wednesday's trading activity. Their dominance for the third successive trading day left the bears stranded. The sentiment reading of the tradable counters remains strongly bullish. Bear domination on Thursday is likely to change the sentiment reading in their favour.

Nifty futures recommendation: During the initial hour of Wednesday's trading the September month contract lost around fifteen points. Bears failed to capitalise on it as they succumbed to the underlying bull pressure. The September contract moved within a band of 50 points. It closed higher with a gain of nearly 33 points with respect to previous close.

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The long position in the September contract remains undisturbed. Thursday being the expiry day for the September contract, allow the position to expire in case the stop is not hit. Bearish trigger level is given for the October contract. In the normal course of trading, these levels are unlikely to be triggered.

Stock futures recommendation: The composition of the top-10 active counters list underwent a change. Hindustan Lever gained entry with the exit of REL. The ranking of the list had a minor change with IPCL moving to the third position.

None of the counters in the list are in the downtrend. Bear move on Thursday could be a threat to most of the uptrend counters in the list. Fresh entry levels for all counters are given for the October contract. Selling opportunities are likely to exist in six counters. Buying opportunities are likely to exist in two counters. Selling in Tata Steel is likely to be the best bet for Thursday's trading. This counter is in the uptrend. Bear move on Thursday has the potential to reverse the prevailing uptrend in this counter.

Cash segment: There were no new entries or exits to the top-10 tradable list. The ranking of the list underwent a change. Rolta and Satyam interchanged their positions.

Bear move on Thursday is likely to terminate most of the uptrend counters in the list. On the contrary, the lone downtrend counter — Reliance Capital is likely to be under threat. Selling opportunities are likely to exist in four counters. A lone buying opportunity is likely to exist in Satyam. The best bet for Thursday's trading is likely to be the selling in Sterling Biotech. Sell level for this counter is placed within a rupee from the last traded price. Bear pressure on Thursday is likely to trigger the downtrend in Sterling Biotech.

(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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