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Narrow movement

K. Premkumar

WEDNESDAY'S trading witnessed narrow movement in the index. It moved within a close band of 15 points. Bulls managed to gain marginally from the day's trading. Nifty closed with a gain of eight points with respect to Tuesday's close. The market senti ment reading continues to remain strongly in favour of the bears.

For Thursday, the current trend is likely to continue with the neutral and bullish levels being placed very far off from the last traded value. Irrespective of bull or bear domination on Thursday, the prevailing bearish sentiment is likely to continue.

Index futures recommendation: The nearby September contract moved within a narrow band of 11 points. It opened with a bull gap of eight points. Bulls were unable to consolidate their position. The September contract closed with a gain of nine points w ith respect to the previous day's close.

The exit level for the short position in the non-target based style of trading is still placed around the same level. Bullish trigger levels in both the target and non-target based style of trading remain unchanged. These levels are unlikely to be trig gered on Thursday.

Scrip recommendation: There was a slight change in the top-20 list. ACC regained entry with the exit of Infotech Enterprises. The ranking of the list remained the same with no major changes.

For traders holding positions in Castrol, Infotech Enterprises, Mukta Arts, Sterlite Optical and VSNL, the stop loss is placed at 255.05, 137.75, 70.55, 145.75 and 200.90 respectively.

The sentiment reading continued to be strongly bearish with most of the counters in the downtrend. It is likely to remain the same on Thursday also irrespective of bull or bear domination.

Except ACC, all other counters in the tradable list are likely to be safe. Bull domination on Thursday has the potential to terminate the downtrend in ACC.

Bear pressure that existed in the market has placed the exit and buy trigger levels for most of the tradable counters quite far away from its current level.

Thus leaving the trader with a lone opportunity for Thursday's trading. The likely opportunity is on the long side of ITC. This counter is presently in the sideways mode. Bull domination on Thursday has the potential to initiate a fresh uptrend in th is 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.