The Hindu Business Line : Bear domination

Trading on Wednesday witnessed bear domination. The sentiment reading of the tradable counters changed to 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 June month contract opened with a bear gap of around 14 points from its previous close. The contract moved within a range of around 55 points. It closed with a loss of around 16 points from its previous close.

The long position in the June month nifty futures is exited with profit and initiated a fresh downtrend. The short exit and long entry levels are placed near to its last traded price. These levels are likely to be triggered during Thursday’s trading.

Stock futures

The composition of the top-10 tradable list had a minor change. However, the ranking of the list had no changes. Tata Motors made its way to top-10 list pushing out BHEL and occupied ninth position.

Except Reliance Capital, IDBI and Satyam all other counters in the top-10 list are in downtrend. Bear domination on Thursday is likely to terminate all the uptrend counters except IDBI. On the other hand, all the downtrend counters are under threat for Thursday’s trading. Buying opportunities are likely to exist in SBI, Reliance Industries, Tata Steel, Century Textiles, Hindalco, Tata Motors and ICICI Bank. Selling opportunities are likely to exist in Reliance Capital and Satyam. The best among these is selling in Reliance Capital. This counter is in uptrend. Bear move on Thursday is likely to reverse the current position in this counter.

Cash segment

The composition of the top-10 list had no changes. However, ranking of the top-10 tradable list had minor changes. Infosys moved from third to fifth position and pushed SAIL to one step down in the list. Tata Steel moved from sixth to fourth position and pushed IDBI to one step up. Tata Motors and Satyam interchanged their positions.

Except IDBI, Satyam and BHEL all other counters in the top-10 list are in downtrend. All uptrend counters are likely to be under threat for Thursday’s trading. Bull domination on Thursday is likely to terminate all the downtrend counters. Buying opportunities are likely to exist in SBI, Reliance Industries, Tata Steel, Infosys, SAIL, Tata Motors and Hindalco. The selling opportunities are likely to exist in IDBI, Satyam and BHEL. The best among the above is likely to be buying in Infosys. This counter is in downtrend. Bull 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.