The Hindu Business Line : Marginal loss

BEARS were in control during the initial hours of trading onWednesday. Later, bulls took over and left the bears with marginal gains. The market sentiment reading continues to remain neutral. Bull domination on Thursday is likely to change the sentiment in their favour. Otherwise, it is likely change in favour of the bears.

Nifty Futures Recommendation: The March contract opened with a bear gap of 7 points and went further down by another 6 points. During the wee hours of the day's trading, bulls made a smart recovery to recoup most of their losses. The intra-day movement in the March contract was around 16 points. It closed with a marginal loss of 3 points with respect to the previous close.

Bears were successful in initiating the downtrend in the March contract. However, this is in the danger zone as its exit level is placed just 7 points away from its closing value. Bull move on Thursday is likely to terminate the downtrend in the March contract. Bullish trigger level is still placed around the same level.

Stock futures recommendation: Tata Engg regained entry with the exit of Reliance Petro. Infosys moved to the third position followed by Reliance Industries and State Bank. The exit level for the downtrend in Reliance Petro is placed at Rs 28.60. Satyam Computer continues to dominate the trading activity followed by Hindustan Petro and Infosys.

The uptrend in Ranbaxy is likely to be under threat from the bears. On the other hand, the downtrend counters — Reliance Industries, Satyam Computer and State Bank — are likely to be under threat. Traders holding positions in the above counters will have to be cautious.

For Thursday, traders are left with a lone opportunity on either side of trading. This is likely to exist in Satyam Computer on the long side and Ranbaxy on the short side. Between the two, the best is likely to be the selling in Ranbaxy. The counter is in the uptrend. Its exit and bearish trigger levels are placed quite closer to its last quoted price. Bear move on Thursday is likely to reverse the prevailing uptrend in the counter.

Cash segment: There were no new entries or exits to the top-10 list in the cash segment. The ranking of the list had a minor change. Hindustan Petro and IBP Co interchanged their positions.

Bull domination on Wednesday is likely to terminate the uptrend in IBP Co. Except Digital, all the other downtrend counters are likely to be under threat.

There is unlikely to exist any opportunity for the bulls. Selling opportunities are likely to exist in IBP Co and Reliance Industries. The best bet for Thursday's trading is likely to be Reliance Industries. Its sell level is placed quite closer to its closing price. Bear domination on Thursday has the potential to initiate the 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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