The Hindu Business Line : Volatile movement

Tuesday’s trading activity witnessed volatile movement. However the sentiment reading of the tradable counters remains bullish. Bear move on Wednesday is likely to change the sentiment reading in their favour. On the contrary, the current sentiment reading is likely to be strengthened with additional counters.

Nifty Futures

The January month contract opened with a bear gap of around 13 points from its previous close. The January month contract moved within a range of around 59 points. The January month contract closed with a loss of around two points from its previous close.

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Volatile movement during the day reversed the uptrend in the initial part of the day’s trading. However, during the later part of the day’s trading short position too exited. Both the long entry as well as short entry levels are placed quite far away from its last traded price. The nearest among the two is buying level. Bull move during Wednesday is likely to initiate fresh uptrend in Nifty January month contract.

Stock futures

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. ICICI Bank and MTNL interchanged their positions. The short exit level for SBI is placed at 2420.05.

Except Reliance Industries, all other counters in the top-10 list are in uptrend. The uptrend counters Reliance Capital, GAIL, ICICI Bank, IDBI and VSNL are likely to be under threat for Wednesday’s trading. On the other hand, bull move on Wednesday is likely to terminate Reliance Industries. A lone buying opportunity is likely to exist in Reliance Industries. Selling opportunities are likely to exist in Reliance Capital, GAIL, ICICI Bank, IDBI and VSNL. The best among the above is likely to be selling in GAIL. This counter is in uptrend. Bear move on Wednesday is likely to reverse the existing trend in this counter.

Cash segment

The composition of the top-10 list had minor changes. Tata Power made its way to top-10 list pushing out VSNL. The long exit level for VSNL is placed at 750.95.

Except Reliance Industries, ICICI Bank and Infosys, all other counters in the top-10 list are in uptrend. The uptrend counters SAIL, GAIL, Reliance Capital and HDFC are likely to be under threat for Wednesday’s trading. On the other hand, bull move on Wednesday is likely to terminate all the downtrend counters in the list. Buying opportunities are likely to exist in Reliance Industries, ICICI Bank and Infosys. Selling opportunities are likely to exist in SAIL, GAIL, Reliance Capital and HDFC. The best is likely to be selling in SAIL. This counter is in downtrend. Bull move on Wednesday 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.