BULLS were in control of Wednesday's trading activity. Their dominance for the second successive trading day left the bears stranded.
The sentiment reading of the tradable counters stands strongly bullish. Bear domination on Thursday is likely to reduce the bull count by a substantial margin thereby resulting change in the sentiment reading.
Nifty futures recommendation: The June contract initially lost around five points but could not sustain as they yielded to bull pressure. It moved within a band of 23 points. The June contract closed with a gain of 13 points with respect to the previous close.
Bull domination during the day led to the initiation of the uptrend in the June contract. In the normal course of trading on Thursday, the initiated long position is unlikely to be disturbed. Bearish trigger level for the June contract is placed quite far away.
Stock futures recommendation: The composition as well as the ranking of the top-10 tradable counters remain intact.
The top three traded counters in this segment were Tata Steel, Reliance and Satyam.
For those still holding short position in NTPC, may do so with the stop loss placed at 86.30.
Bear pressure on Thursday is likely to terminate most of the uptrend counters in the list. On the contrary, the downtrend in Arvind Mill and Tata Motors is likely to be under threat.
Buying opportunities are likely to exist in three counters. Selling opportunities are likely to exist in six counters.
For Thursday, the best bet is likely to be buying in Ranbaxy. This counter is in the sideways mode. Buy level for this counter is placed quite close to the current level. Bull move on Thursday is likely to trigger the uptrend in Ranbaxy.
Cash segment: There were no new entries or exits to the top-10 tradable list. The ranking of the list too remains unchanged. Wednesday's market action resulted in initiating the uptrend in the recommended counter State Bank.
The downtrend in Maruti is likely to terminate at Rs 447.80.
Except for Tata Motors, all the other counters in the list are in the uptrend. For Thursday, most of the counters in the list are likely to be under threat. Bears are likely to have opportunities in almost all the counters. A lone buying opportunity is likely to exist in Tata Motors.
Selling in Ranbaxy is likely to be the best bet for Thursday's trading. The exit and bearish trigger level for this counter is placed close to the last traded price. Bear pressure on Thursday is likely to reverse the prevailing uptrend in Ranbaxy.
(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.