The Hindu Business Line : Bear domination

Bears dominated Wednesday's trading activity. The sentiment reading of the tradable counters remains bearish. Bull move on Thursday is likely to change the sentiment reading in their favour. On the contrary, the prevailing bearish sentiment is likely to be further strengthened with additional counters.

NIFTY FUTURES

The October month contract opened with a bull gap of around 25 points and further went up by around 14 points. However, bulls could not capitalise on their initial momentum and gave way to bears. The October contract moved with in a range of around 77 points making an intraday low of 3535. It closed with a loss of around 24 points from its previous close.

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The long position in the October contract exited and entered short. The short exit and long entry levels are placed quite far away from its last traded price. In the normal course of trading these levels are unlikely to be triggered during trading on Thursday.

STOCK FUTURES

The composition of the top-10 tradable list had no changes. However, the ranking of the list had minor changes. Tata Motors and Infosys interchanged their positions. The top-3 tradable counters in this segment were Infosys, Reliance Industries and Tata Steel.

There are two uptrend counters and eight down trend counters in the top-10 tradable list. Both the uptrend counters in the list are likely to be under threat for Thursday's trading. On the other hand, five down trend counters are likely to be terminated. There are five opportunities on the buy side and a lone opportunity on the sell side for Thursday's trading. The best is likely to be selling in Satyam. This counter is in uptrend. Bear move on Thursday is likely to change the prevailing trend in this counter.

CASH SEGMENT

The composition of the top-10 tradable list had no changes. However, the ranking of the list had minor changes. Maruti moved up to second position and Reliance Industries moved down to seventh position. Infosys and I-FLEX solutions moved up to fourth and fifth positions respectively.

There are four uptrend counters and six down trend counters in the top-10 tradable list. All the uptrend counters in the list are likely to be under threat for Thursday's trading. On the other hand, four down trend counters are likely to be terminated. There are four opportunities on the buy side and three opportunities on the sell side for Thursday's trading. The best is likely to be selling in i-flex Solutions. This counter is in uptrend. Bear move on Thursday is likely to reverse the existing trend in 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.