The Hindu Business Line : Volatile movement

Monday’s trading activity witnessed volatile movement. The sentiment reading of the tradable counters changed to bullish. Bear move on Tuesday 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

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The January month contract opened with a bull gap of around two points from its previous close. The January month contract moved within a range of around 71 points. The January month contract closed with a gain of around 21 points from its previous close.

Bull move during the day reversed the short position in the January month contract. The long exit and short entry levels are placed quite far away from its last traded price. These levels are unlikely to be triggered during Tuesday’s trading activity.

Stock futures

The composition and the ranking of the top-10 list had minor changes. BHEL, Jet Airways, ACC, PNB and BPCL made their ways to the top-10 list pushing out Reliance Capital, IDBI, Reliance Energy, NTPC and National Aluminium. Tata Steel moved from second to seventh position in the list. Bank of Baroda and ICICI Bank moved one step higher in the list. Tata Tea moved from seventh to fifth position in the list. The short exit level for Hindalco, GAIL and National Aluminium is placed at 210.45, 517.80 and 464.95 respectively.

Except Tata Tea, Jet Airways, Tata Steel and ACC all other counters are in uptrend. The uptrend counters ICICI Bank and BHEL are likely to be under threat for Tuesday’s trading. On the other hand, bull move on Tuesday is likely to terminate Tata Tea. A lone buying opportunity is likely to exist in Tata Tea. Selling opportunities are likely to exist in ICICI Bank and BHEL. The best among the above is likely to be buying in Tata Tea. This counter is in downtrend. Bull move on Tuesday is likely to reverse the trend in this counter.

Cash segment

The composition and the ranking of the top-10 list had minor changes. ONGC, TCS and Cipla made their way to the top-10 list pushing out HDFC, MTNL and BHEL. Tata Steel and Reliance Industries interchanged their positions. ITC moved from sixth to third position in the list. Satyam moved from last to seventh position in the list. The short exit level for SAIL and HDFC is placed at 259.60 and 3148.05 respectively.

There are five uptrend and five downtrend counters in the top-10 list. The uptrend counters Tata Steel and ICICI Bank are likely to be under threat for Tuesday’s trading. On the other hand, bull move on Tuesday is likely to terminate ONGC and Cipla. Buying opportunities are likely to exist in ONGC and Cipla. Selling opportunities are likely to exist in Tata Steel and ICICI Bank. The best is likely to be selling in Tata Steel. This counter is in uptrend. Bear move on Tuesday 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.