The Hindu Business Line : Bear domination

Wednesday’s trading activity witnessed bear domination. However, the sentiment reading of the tradable counters remain indecisive. Bull move on Thursday is likely to change the sentiment reading in their favour. On the contrary, it is likely to change the sentiment reading in favour of bears.

NIFTY FUTURES

The November contract opened with a bull gap of around 63 points from its previous close. The contract moved within a range of around 185 points and closed with a loss of around 109 points from its previous close.

The initial move during the day triggered long entry level in the November contract. However, bear domination during the later part of the day’s trading led to the exit of long position. The long entry level is placed quite far away from its last traded price. This level is unlikely to be triggered during Thursday’s trading. The short entry level is placed quite nearer to its last traded price. Bear move during Thursday is likely to initiate fresh downtrend in Nifty November month contract.

STOCK FUTURES

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The composition of the top-10 list had no changes. However the ranking of the top-10 list had minor changes. Reliance Industries and Reliance Capital interchanged their positions. IDBI moved from fourth to sixth position in the list. SBI and NTPC moved one step higher in the list. Hindalco moved from ninth to seventh position in the list. Bank of India and ICICI Bank moved one step lower in the list. The long exit level for Satyam is placed at 425.50.

Reliance Energy, Reliance Industries, Reliance Capital, Hindalco and ONGC are in downtrend in the top-10 list. SBI, IDBI, Bank of India and ICICI Bank are in uptrend. All the uptrend counters are likely to be under threat for Thursday’s trading. On the other hand, bull move on Thursday is likely to terminate Reliance Industries. A lone buying opportunity is likely to exist in Reliance Industries. Selling opportunities are likely to exist in SBI, NTPC, IDBI, Bank of India and ICICI Bank. The best among the above is likely to be selling in NTPC. This counter is in sideways mode. Bear move on Thursday is likely to initiate a fresh downtrend in this counter.

CASH SEGMENT

The composition and the ranking of the top-10 list had no changes.

Reliance Industries, Reliance Energy, Reliance Capital and ONGC are in downtrend in the top-10 list. ICICI Bank, SBI, IDBI, BHEL and Bank of India are in uptrend. All the uptrend counters are likely to be under threat for Thursday’s trading. On the other hand, bull move on Thursday is likely to terminate Reliance Industries and Reliance Capital. Buying opportunities are likely to exist in Reliance Industries, Reliance Capital and Infosys. Selling opportunities are likely to exist in all the uptrend and sideways counters. The best among the above is likely to be selling in ICICI Bank. This counter is in uptrend. Bear move on Thursday is likely to reverse the 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.