Date:15/03/2006 URL: http://www.thehindubusinessline.com/2006/03/15/stories/2006031502661500.htm

Back Volatility continues

K. Premkumar

Tuesday's trading action witnessed volatile movement. However, the sentiment reading of the tradable counters turned to bearish. Bull domination on Thursday is likely to change the sentiment reading in their favour. On the contrary, the prevailing bearish sentiment is likely to be strengthened.

Nifty futures: The March contract opened with a bear gap of around 18 points. It moved with in a range of around 49 points making an intra-day high of 3212.80. It closed with a loss of around 11 points from its previous close.

The long position in the March contract exited in the morning session. As the low of 3128 made in the morning was a freak movement it was disregarded and 3163.20 was considered as low for our analysis. The long entry level for the March contract is placed quite far away and the short entry level is placed quite nearer to its last traded price. Bear pressure on Thursday is likely to initiate fresh short in the March contract.

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Stock futures recommendation: The composition and the ranking of the top-10 tradable list had no changes. The top-3 tradable counters in this segment were State Bank, Reliance and Infosys.

All the uptrend and downtrend counters in the top-10 tradable list are likely to be under threat for Thursday's trading. There are ample opportunities on the buy side and five opportunities on the sell side. The best is likely to be selling in Bajaj Auto. This counter is in uptrend. Bear move on Thursday is likely to reverse the existing trend in this counter.

Cash segment: The composition of the top-10 tradable list had no changes. However, the ranking of the list had minor changes. Maruti and Tata Motors interchanged their positions. Reliance and Satyam moved up to third and seventh positions respectively. The long exit level for Tata steel is placed at 455.65.

Both the uptrend counters in the top-10 tradable list are likely to be under threat for Thursday's trading. On the other hand four downtrend counters in the list are likely to be terminated. There are lots of opportunities for bulls as well as bears during Thursday's trading. The best is likely to be buying in L&T. Bull pressure on Thursday is likely to trigger the uptrend in L&T.

(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.