The Hindu Business Line : Bears reign

BEARS prevailed over Tuesday's trading activity. The day's market action resulted in increasing the bear count by a considerable margin. The sentiment reading of the tradable counters stands bearish. Bull domination on Wednesday has the potential to change the sentiment reading in its favour. Otherwise, the prevailing bearish sentiment is likely to be further strengthened.

Nifty Futures Recommendation: The near month August contract opened three points above the previous close and went further by another five points. Later on, bears took control of the day's proceedings and wiped out their early losses. The August contract moved within a band of 20 points registering an intra-day low of 2352. It closed with a marginal gain of two points over Friday's close.

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The day's market action had no impact on the recommended levels. Bearish trigger level for the August contract has now been moved closer to the current level. Bear move on Wednesday has the potential to trigger the downtrend in the August contract.

Stock Futures Recommendation: The composition as well as the ranking of the top-10 tradable counters remains undisturbed. Tata Steel, Reliance and VSNL were the top three traded counters in this segment.

Except for the downtrend in Satyam, all the counters in the list are likely to be under threat. Bears are likely to have opportunity in three counters. Buying opportunities are likely to exist in five counters. Selling in ICICI Bank is likely to be the best bet for Wednesday's trading. Sell level for this counter is placed within two rupees from the last traded price. Bear pressure on Wednesday is likely to initiate a fresh downtrend in ICICI Bank.

Cash Segment: The composition of the top-10 active counters list remains intact. The ranking of the list had few changes. Tata Steel moved to the fourth position followed by SAIL and State Bank.

Bull pressure on Wednesday is likely to terminate the downtrend in Infosys, Reliance and State Bank. On the other hand, the uptrend in SAIL and Tata Steel is likely to be under threat. Buying opportunities are likely to exist in four counters. Selling opportunities are likely to exist in two counters. For Wednesday, the best is likely to be the buying in ONGC. Bullish trigger level for this counter is placed quite closer to the current level. Bull move on Wednesday is likely to trigger the uptrend in ONGC.

(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.

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