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Uptrend steady

K. Premkumar

THE uptrend in the S&P CNX Nifty and the BSE Sensex survived and made steady progress on Monday. Market sentiment, however, worsened, continuing to strongly favour the bears.

The bull domination has further strengthened the position of the bulls, therefore, the prevailing uptrend is likely to prolong in the normal course of trading on Monday. The termination of the uptrend in the indices is possible only in case of strong bea r domination.

The initiation of a bear trend is still tougher in the Nifty as the bear trigger level is placed even lower than the neutral trigger levels. On the trading sentiment front, the strong support for the bears is still expected even if the bulls were to domi nate on Tuesday.

Index watch: The S&P CNX Nifty opened around the same value as it had closed on Friday. The initial bull move was maintained throughout the day. It resulted in the index gaining around 42 points from the previous close.

As the neutral level is placed at 1,232.80, which is 78 points away from the current closing level, a strong bear move has the potential to terminate the prevailing uptrend. The bear trigger is placed even lower at 1,201.45 and is unlikely to be triggere d.

Similar upward trend was visible in the Sensex also. The BSE Sensex made steady gains and closed strong near the high of the day.

The neutral and bearish trigger levels are both placed at over 240 points. Only a very powerful bear move on Tuesday has can stop and reverse the on-going uptrend in this index.

Scrip watch: The trend of the top 20 list underwent some minor changes with the shift of three counters, namely Global, Infosys and Zee Tele, to the bearish trend. The uptrend in Himachal was terminated. Thus, the bear count is at 15; bull count is at th ree and the remaining two counters are in sideways trend. This clearly brings out the trading sentiment in favour of the bears.

Irrespective of bull or bear domination, the trading sentiment is likely to remain strongly in favour of the bears during Tuesday's trading.

The composition of the top 20 list along with the top 10 ranking among the list remains unchanged. For those still tracking the uptrend in ACC, the neutral trigger level is at Rs. 112.65. This trigger level can not be found in the table since ACC is not in the top 20 list at the moment.

With most of the counters in the bear mode, there are unlikely to be any selling opportunities for the bears on Tuesday. However, for the bulls buying opportunity exists in Software Solutions and Himachal.

Among the above two buying recommendations, the beat is likely to be Software Solutions. The prices in this counter are currently in the downtrend, which has been on since May 18.

The last traded price is now placed very close to its bullish trigger level. A mild bull pressure on Tuesday has the potential to initiate a new bull trend in this counter.

Finally, it can be said the uptrends in the indices are steadily gaining ground. Barring a strong bear move on Tuesday, the uptrends are most likely to be intact. The uptrend is still not enjoying breath, meaning that the trends of most of the actively t raded counters are still down. Even if the bulls were to dominate on Tuesday, the trading sentiment would still be in the support of the bears.

(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.