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Saturday, Feb 07, 2004

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Markets - Technical Analysis

Bulls bounce back

K. Premkumar

MARKETS remained indecisive till the noon session of Friday's trading. In the final moment, bulls geared up their sleeve and bounced back smartly.

The sentiment reading of the tradable counters continues to remain bullish. Irrespective of bull or bear domination on Monday, the prevailing sentiment is likely to continue with a slight change in its value.

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Nifty Futures Recommendation: During the morning session, the February month contract lost 11 points. Later on, bulls took over and wiped out their losses. February contract moved within a band of 47 points. It closed for the week with a gain of 30 points with respect to Thursday's close.

The long position in the February contract remained intact. In the normal course of trading on Monday, the uptrend is unlikely to be disturbed. Bearish trigger level is still placed far away.

Stock Futures Recommendation: The top-10 tradable list underwent a change. M&M gained entry with the exit of ACC. Tata Steel, Reliance and State Bank were the top three traded counters in this segment.

Friday's market action initiated the uptrend in Satyam Computer. This is likely to continue on Monday. The uptrend in CNX IT, GAIL and Reliance is likely to be under threat. Traders are left with a lone opportunity on either side for Monday's trading. This is likely to exist in Maruti and M&M. Between the two, the best bet is likely to be the buying in Maruti. This counter is closed at 451.00. Its bullish trigger level is placed within four rupees from its close. Bull pressure on Monday is likely to trigger this level.

Cash Segment: The composition of the top-10 list had a change. ONGC paved the way for Tata Power. The ranking of the list remains the same with no major changes.

Bulls initiated the uptrend in the recommended counter - Satyam. The exit level for this counter is placed in the negative zone. None of the counters in the list are in the downtrend. For Monday, the uptrend in Infosys and Reliance is likely to be terminated. Entry levels for all the tradable counters are placed slight away from their closing values. The nearest entry level is for SAIL on the long side. Bull domination on Monday is likely to initiate the uptrend 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 Chennai-based technical analyst and fund management consultant.

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