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K. Premkumar

BEARS continued their dominance over Tuesday's trading and brought a steep fall in the index. Stock prices across the board fell sharply. During the close, the bulls managed to recover partially. Barring a few counters, all the other counters in the tradable list are in the downtrend. The market sentiment reading of the tradable counters stands strongly bearish. Bull domination on Wednesday is likely to reduce the bear count by a considerable margin. Otherwise, the prevailing bearish sentiment is likely to continue.

Nifty futures recommendation: The May contract opened with a bear gap of 3 points. Thereafter, bears brought about a steep fall in the May contract registering a low of 1040. During the wee hours of the day's trading, bulls made a partial recovery. The May contract closed with a loss of around 20 points with respect to Monday's close.

The short position is now locked up with a nominal profit of 13 points. The termination and reversal of the downtrend are unlikely as the neutral and bullish trigger levels are placed at a faraway level.

Stock futures recommendation: The top-10 tradable counters in this segment underwent a change. ACC gained entry with the exit of Ranbaxy. BPCL and Digital interchanged their positions. The exit level for the downtrend in Ranbaxy is placed at Rs 865.05.

Satyam Computer continues to dominate the trading activity in the futures segment followed by Reliance Industries and Infosys.

Except Hindustan Petro, all the other counters in the tradable list are in the downtrend. Bull domination on Wednesday, is likely to terminate the downtrend in ACC, BPCL, Digital, Infosys and L&T. A lone opportunity is likely to exist on the short side on Hindustan Petro. Its bearish trigger level is placed quite closer to its last quoted price. Bear pressure is likely to initiate the downtrend in the counter.

Cash segment: There were no new entries or exits to the top-10 tradable list. The ranking of the tradable list had a few changes. Polaris Soft moved to the fourth position followed by Digital, Satyam Computer and SSI.

For Wednesday, downtrend in Digital, NIIT and VisualSoft is likely to be under threat. So, traders holding positions in the above counters will have to closely monitor their price movements. The continuous bear-run has left the traders with no opportunity for Wednesday.

(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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