The Hindu Business Line : Bulls march ahead

FOR the third successive trading day, the sentiment reading of the tradable counters stands favouring the bulls. Bear domination on Tuesday is likely to reduce the bull count to a bare minimum and thereby change the sentiment reading to bearish. Otherwise, the prevailing sentiment is likely to continue with added strength.

Nifty futures recommendation: The March contract opened firmly with a bull gap of four points. The bulls dominated major part of Monday's trading activity. March contract moved within a band of 17 points, making an intra-day high of 1891.70. It closed with a gain of 15 points with respect to Friday's close.

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The long position in the March contract remains undisturbed. The trade is now locked-up with a nominal profit of seven points. In the normal course of trading on Tuesday, the long position in the March contract is likely to continue. However, bear domination has the potential to terminate the uptrend.

Stock futures recommendation: The composition as well as the ranking of the top-10 tradable list remain unchanged. GAIL, ONGC and Tata Steel were the top three traded counters in this segment. Monday's market action resulted in initiating the uptrend in the recommended counter-Tata Steel.

Except for the uptrend in Maruti, all the other counters in the list are likely to be under threat. Bears are likely to have opportunity in M&M and Tata Motors. On the other hand, a lone opportunity is likely to exist in CNX IT.

Selling in M&M is likely to be the best bet for Tuesday's trading. This counter is in the uptrend and has closed at Rs 495.15. Bear domination on Tuesday has the potential to reverse the prevailing trend in this counter.

Cash segment: The top-10 tradable counters list and their ranking remain unchanged. Bulls were successful in triggering the uptrend in the recommended counter — Tata Steel. However, the exit level for the initiated position is in the danger zone.

Except for the uptrend in SAIL, all the other counters in the list are likely to be under threat for Tuesday. Buying opportunities are unlikely to exist for Tuesday's trading. Selling opportunities are likely to exist in M&M, Maruti and Tata Motors.

The best among the above is likely to be Maruti. This counter is in the uptrend. Its exit and bearish trigger levels are placed within Rs 2 from its closing value. Bear pressure on Tuesday is likely to reverse the uptrend in the 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.