The Hindu Business Line : Bear domination

BEARS were successful in terminating most of the uptrend counters in the tradable list. However, the sentiment reading of the tradable counters remains neutral.

Bear pressure on Thursday is likely to change the sentiment reading to bearish. On the other hand, the prevailing sentiment is likely to continue with a slight change in its value.

Nifty futures recommendation: During the open of Wednesday's trading, the August contract gained five points. Bulls failed to capitalise on it as they yielded to bear pressure. The August contract moved within a band of 38 points registering an intra-day low of 1613.10. It closed lower with a strong bearish note.

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Bear domination during the day led to the initiation of the downtrend in the August contract. In the normal course of trading on Thursday, the initiated short position is likely to continue. Both the exit and bullish trigger levels for the August contract are placed far away.

Stock futures recommendation: The composition of the top-10 tradable list remains unchanged. The top three traded counters in this segment were Tata Motors, Reliance and Tata Steel.

Except for Reliance and Tata Steel, all the other counters in the list are in the sideways mode. For Thursday, the uptrend in Reliance is likely to be under threat. Selling opportunities are likely to exist in all most all the counters. Buying opportunities are likely to exist in CNX IT and Satyam.

The best bet is likely to be the selling in Satyam. Sell level for this counter is placed within a rupee from its closing value. Bear pressure on Thursday is likely to initiate a fresh downtrend in Satyam.

Cash segment: There were no new entries or exits to the top-10 tradable list in this segment. The ranking of the list too remains intact. Most of the counters in the list are in the sideways mode.

The prevailing uptrend and downtrend counters in the list are likely to be safe. Bears are likely to have opportunity in seven counters. A lone buying opportunity is likely to exist in Infosys.

Selling in Satyam is likely to be the best for Thursday's trading. Bearish trigger level for this counter is placed closer to its current level. Bear move on Thursday is likely to trigger the downtrend in Satyam.

(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 technical analyst and fund management consultant.