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Bulls lose gains

K. Premkumar

THE index opened with a bear gap of about nine points on Friday. It saw a rise of about 23 points from the day's open in the initial hours of trading. Later, the bears took over, and the index slid by about 58 points from the day's high.

Due to this, the bulls lost all the gains made in the day. Finally, the index closed about nine points above the day's low. On the whole, this was a loss of about 35 points when compared to that of the previous last traded value.

The downtrend in the index continued into the second calendar day on Friday. Both the neutral and the bullish trigger levels are quiet far away from the day's last traded value. Hence, neither is likely to be triggered on Monday.

The bearish sentiment of the market continued on Friday. The sentiment is likely to remain the same in favour of the bears irrespective of the bear or bull domination on Monday.

Recommended follow-up: This section closely tracks a maximum of ten securities at a time and assists traders in exiting the logged position. The idea behind tracking a limited number of securities from the available twenty opportunities is to show how th e selection process is being done using the `best to trade' column from the top 20 table.

As the stations fall vacant from the top-10 table, from among the counters triggering the signal on that day, the best trade rankers find their way to fill the vacant stations. The selection function is critical in a real life-trading scenario given the limited capital and risk taking capabilities of the traders.

The uptrend in Zee Tele exited from the top-10 list on Friday. The vacant station remains unoccupied since no fresh counters were triggered. Among the nine logged-on counters, three are in the uptrend and six are in the downtrend.

None of the downtrend counters is likely to be under threat in case of a bull domination on Monday. If the bears were to dominate, the uptrend in ICICI is likely to be under threat.

Day's recommendation: It is better to trade in securities which have got good volume of trading and decent volatility. The basic idea behind this is that the traders should be able to enter and exit at the intended price levels with very little slippage, thereby keeping the cost of trading to bare minimum.

Based on an index computed using the trading volume, number of transactions and price movement, the top 20 scrips have been chosen and ranked from among all the scrip traded in NSE. This list is highly dynamic and keeps pace with the market activity. The top-20 list remains the same.

There is unlikely to be any buying opportunities for the bulls on Monday. Selling opportunities for the bears are likely to exist in Ranbaxy and SAIL. Between these two counters, the best is likely to be the selling in Ranbaxy.

The counter is at present in the sideways position. Its sell level is close to its last traded value. Hence, a bear move prevailing on Monday is likely to enable the counter trigger its sell level.

(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.