Financial Daily from THE HINDU group of publications
Friday, Oct 07, 2005
Financial Daily from THE HINDU group of publications Friday, Oct 07, 2005 |
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Markets
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Technical Analysis Bear domination K. Premkumar
THURSDAY'S market action resulted in changing the sentiment reading into bearish. Bull move on Friday has the potential to change the sentiment reading into neutral. On the other hand, the prevailing bearish sentiment is likely to be further strengthened. Nifty futures recommendation: The October month contract opened with a bear gap of 27 points and further went down by another 57 points making an intra-day low of 2561. Bears were in total control over Thursday's trading. The October month contract moved within a wide range of 69 points. It closed lower with a substantial loss of 81 points from the previous day's close. The bear move on Thursday terminated the uptrend in the October month contract. The bullish trigger level is placed far away. The bearish trigger level is placed closer to its last traded price. The bear move on Friday is likely to initiate fresh downtrend in October month contract. Stock futures recommendation: There is no change in the composition as well as the ranking of the top-10 tradable counters. The top three traded counters in this segment were Reliance, Tata Steel and Satyam Computer. Bear domination on Friday is likely to terminate all the uptrend counters in the list. On the other hand, the three downtrend counters Reliance, State Bank and Tata Motors are likely to be under threat. There are two opportunities on both sides of trading. The best bet for Friday's trading is likely to be buying in State Bank. Bull move on Friday has the potential to reverse the existing trend in the recommended counter. Cash segment: The composition and ranking of the list had minor changes. Scandent Solutions moved out of the top 10 tradable list giving way to IPCL. ITC moved up to seventh rank while Satyam Computer moved down to eighth position followed by Sterling Biotech and IPCL. All the uptrend counters are likely to be under threat for Friday's trading. On the contrary, downtrend in McDowell, Reliance and SRF are likely to be under threat. There are two opportunities on the bear side. Reliance Industries is the lone buying opportunity for Friday's trading. The best bet is likely to be the selling in India Infoline. Bear pressure on Friday is likely to trigger the short entry level for this 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 technical analyst and fund management consultant.
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