The Hindu Business Line : Bear domination

BEARS were in total command of Thursday's trading activity. Their dominance left the bulls with no opportunity to recover during the day's trading. The market sentiment reading of the tradable counters remains bearish with no uptrend counters. Bull domination on Monday is likely to reduce the bear count by a considerable margin. On the contrary, the prevailing bearish sentiment is likely to be further strengthened.

Nifty futures recommendation: The near month April contract opened 4 points below the previous close and went further down by another 15 points. Bulls were unable to make any impact during the day's trading. The April contract closed with a loss of 15 points with respect to Wednesday's close.

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The short position in the April contract was left undisturbed. The position is locked up with a substantial profit of 60 points. In the normal course of trading on Monday, the downtrend in the April contract is unlikely to be disturbed. However, bull domination has the potential to terminate the downtrend. Bullish trigger level for the April contract is placed at a far-away level.

Stock futures recommendation: The composition as well as the ranking of the top-10 tradable list remain intact. The top three traded counters in this segment were Satyam Computer, Infosys and Wipro. Trading activity in Wipro was quite impressive on Thursday with more than 8400 trades. The exit level for the downtrend in Tata Engg is placed at Rs 156.55.

For Monday, the downtrend in Hindustan Petro, NIIT, Reliance Industries and Tata Steel is likely to be under threat. Buying opportunities are likely to exist in Digital, Hindustan Petro, Reliance Industries and Tata Steel. A lone selling opportunity is likely to exist in Polaris Soft.

The best among the above is likely to be the buying in Tata Steel. The same counter was recommended for Thursday's trading. Bulls failed to initiate the uptrend in this counter. The exit and buy level for this counter is still placed closer to its current level.

Cash segment: There were no new entries or exits to the top-10 tradable list. The ranking of the list had a minor change. Geometric Soft and Wipro interchanged their positions.

Bull domination on Monday is likely to terminate the downtrend in Geometric Soft and Reliance Industries. Traders are left with limited opportunities for Monday's trading. Buying opportunities are likely to exist in Digital and Reliance Industries. A lone selling opportunity is likely to exist in Hughes Soft.

The best bet is likely to be the buying in Reliance Industries. The counter is in the downtrend. Its exit and bullish trigger levels are placed quite closer to its last traded price. Bull domination on Monday has the potential to reverse the prevailing downtrend in the 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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