The Hindu Business Line : Volatile movement

Thursday’s trading activity witnessed volatile movement. The sentiment reading of the tradable counters changed to bullish. Bear move on Friday 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 contract opened with a bear gap of around 17 points from its previous close. However, bears could not sustain their initial move and gave way to bulls during the later part of the day’s trading. Towards the end of the day’s trading bears recovered their losses. The January contract moved within a range of around 158 points and closed with a loss of around 29 points from its previous close.

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Bull move during the day reversed the short position in the January 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 Friday’s trading activity.

STOCK FUTURES

The composition and the ranking of the top-10 list had minor changes. Tata Motors made its way to top-10 list pushing out BHEL. Reliance Industries and NTPC interchanged their positions. Bank of India moved from fifth to eighth position in the list. The short exit level for ACC is placed at 951.55.

Except Bank of India all other uptrend counters are likely to be under threat for Friday’s trading. On the other hand, bull move on Friday is likely to terminate downtrend in Tata Steel.

A lone buying opportunity is likely to exist in Tata Steel. Selling opportunities are likely to exist in Reliance Energy, Reliance Industries, IDBI, Tata Motors and SBI. The best among the above is likely to be selling in Reliance Industries. This counter is in sideways mode. Bear move on Friday is likely to initiate a fresh downtrend in this counter.

CASH SEGMENT

The composition and the ranking of the top-10 tradable list had minor changes. SBI made its way to top-10 list pushing out Bank of India. Reliance Industries and Reliance Energy interchanged their positions. Reliance Capital, Tata Steel and BHEL moved one step lower in the list. The short exit level for Satyam, TCS and Hindalco are placed at 405.05, 966.05 and 196.15 respectively. The long exit level for Bank of India is placed at 428.45.

Except ITC all other uptrend counters are likely to be under threat for Friday’s trading. On the other hand, bull move on Friday is likely to terminate Tata Steel and BHEL. Buying opportunities are likely to exist in Tata Steel and BHEL.

Selling opportunities are likely to exist in Reliance Industries, Reliance Energy, ICICI Bank, IDBI and SBI. The best is likely to be selling in Reliance Industries. This counter is in sideways mode. Bear move on Friday is likely to initiate a fresh downtrend 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.