BULLS were in total control of Wednesday's trading activity. The sentiment reading of the tradable counters remains strongly bullish. Bear domination on Thursday is likely to reduce the bull count by a considerable margin, thereby resulting in a change in the sentiment reading.
Nifty futures recommendation: The May month contract opened with a bear gap of eight points. Bears failed to capitalise on it as they yielded to the underlying bull pressure. The contract moved within a band of 26 points, registering a high of 2040.95. It closed with a gain of 15 points over the previous close.
With Thursday being the expiry day for the May contract, the prevailing long position may be held with a stop placed at 2002.40. The position is locked up with a nominal profit of eight points. The bearish entry level is given for the June contract.
Stock futures recommendation: The composition of the top-10 tradable counters underwent a change. Bank of India gained entry with the exit of Canara Bank. The top three traded counters in this segment were State Bank, Tata Steel and Reliance.
None of the counters in the list is in the downtrend. For Thursday, most of the uptrend counters in the list are likely to be under threat. The fresh entry levels for all the counters are given for the June contract. Bears are likely to have opportunity in Arvind Mills, Maruti and Reliance.
Buying opportunities are likely to exist in Bank of India and Reliance. Selling in Reliance is likely to be the best bet for Thursday's trading. The bearish trigger level for this counter is placed very close to the current level. Bear pressure on Thursday is likely to initiate a fresh downtrend in Reliance.
Cash segment: The composition of the top-10 active counters list had changed. SAIL gained entry with the exit of PNB. There were a few changes in the ranking. SAIL took the eighth place, followed by Oriental Bank and ONGC.
The downtrend in PNB and the uptrend in Wipro are likely to be terminated at Rs 389.05 and Rs 672.95, respectively.
Bear domination on Thursday is likely to terminate most of the prevailing uptrend counters in the list. On the other hand, the lone downtrend counter Oriental Bank is likely to be under threat. Buying opportunities are likely to exist in three counters, while selling opportunities are likely to exist in seven counters.
The best bet is likely to be buying in Reliance. This counter is in the sideways mode. The buy level for the counter is placed quite
close to the last traded price. A bull move on Thursday is likely to trigger an uptrend in Reliance.
(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.