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Markets - Technical Analysis


Bear domination

K. Premkumar

BEARS were in total command of Friday's trading activity. Their dominance left the bulls with no opportunity to recover during the day's trading. The sentiment reading of the tradeable counters remains bearish. Irrespective of bull or bear domination on Tuesday, the prevailing sentiment reading is likely to continue with a slight change in its value.

Nifty futures recommendation: During the open, the February contract moved by 8 points. Bulls failed to capitalise on it as they yielded to bear pressure. The February contract moved within a band of 63 points. It closed with a loss of 49 points with respect to Thursday's close.

The short position in the February contract remains intact. This is unlikely to be disturbed on Tuesday. Bullish trigger level for the February contract is still placed around the same level.

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Stock futures recommendation: The top-10 tradeable list in this segment underwent a change. ACC gained entry with the exit of M&M. The ranking of the list had few changes. Tata Steel moved to the top slot and Maruti moved to the sixth position. The top three traded counters in this segment were Tata Steel, State Bank and Reliance.

Most of the counters in the list are in the downtrend. Bear domination on Tuesday could be a threat to the lone uptrend counter - Maruti. Traders are left with a lone opportunity for Tuesday's trading. This is likely to exist on the short side of Tata Motors. Its bearish trigger level is placed closer to its last traded price. Bear move on Tuesday is likely to initiate a fresh downtrend in this counter.

Cash segment: There were no entries or exits to the top-10 tradeable list. The ranking of the list had some changes. Maruti moved to the fourth position followed by State Bank and Tata Motors.

For Tuesday, the downtrend in Maruti and the uptrend in Tata Motors are likely to be under threat. Bears are likely to have opportunity in GAIL, Infosys, SAIL and Tata Motors. A lone buying opportunity is likely to exist in Maruti. The best among the above is likely to be the selling in Infosys. This counter is in the sideways mode. Its sell level is placed very close to its last traded price. Bear pressure on Tuesday is likely to initiate the downtrend 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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