The Hindu Business Line : Bear domination

BEARS were in total control of Monday's trading activity. Bulls were unable to make any impact during the day's trading. The sentiment reading of the tradable counters stands neutral. Irrespective of bull or bear domination on Tuesday, the prevailing sentiment is likely to continue, thus indicating a strong undercurrent in favour of the sideways movement.

Nifty futures recommendation: The near month March contract opened with a bull gap of 4 points. Bulls failed to capitalise on it. Bears made an instant recovery and charged to end with substantial gains. The movement in the March contract was around 21 points. It closed with a loss of 13 points with respect to the previous close.

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Bears were successful in initiating the downtrend in the March contract. In the normal course of trading on Tuesday, the downtrend is likely to continue. Bull domination has the potential to terminate the downtrend. Bullish trigger level is placed far away and this is unlikely to be triggered on Tuesday.

Stock futures recommendation: There were no new entries or exits to the top-10 tradable counters. The ranking of the list had a few changes. Infosys moved to the second position and Tata Engg to the eighth position followed by MTNL and Digital. Those still holding short positions in Reliance Petro may do so with the stop loss placed at 27.85. Satyam continues to remain as the top traded counter in this segment followed by Infosys and Sterlite Optical.

Bear domination on Tuesday is likely to terminate both the uptrend counters in the list. Bears are likely to have opportunity in BHEL, Digital, MTNL, Satyam Computer, State Bank and Tata Engg. Bulls are left with a lone opportunity in Digital. The best among them is likely to be the selling in Satyam Computer for Tuesday's trading. This counter is in the sideways mode. Its sell level is placed closer to its last traded price. Bear pressure on Tuesday is likely to initiate a fresh downtrend in this counter.

Cash segment: The top-10 tradable list in the cash segment underwent a change. BPCL gained entry with the exit of HCL Tech. The ranking of the list remains undisturbed.

Bear domination on Tuesday is likely to be a threat to the following uptrend counters — Infosys, Wipro and Zee Tele. The lone downtrend counter — Reliance Industries is likely to be safe. For Tuesday, opportunities are likely to exist in Digital and State Bank on either side of trading. However, the best bet is likely to be on the long side of State Bank. Its buy level is placed quite close to its last traded price. Bull move on Tuesday is likely to initiate the uptrend in this 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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