The Hindu Business Line : Bearish sentiment prevails

Tuesday's trading activity witnessed volatile movement. The sentiment reading of the tradable counters remain bearish. Bull move on Wednesday is likely to change the sentiment reading in their favour. On the contrary, the prevailing sentiment reading is likely to be further strengthened.

Nifty Futures Recommendation

The July month contract opened with a bull gap of around 26 points from Monday's close. The July month contract moved with in a range of around 98 points making an intra-day low of 2941.55. It closed with a loss of around 7 points from its previous close.

The short position in the July month contract remains intact. The short exit and long entry levels are placed quite far away from Tuesday's last traded price. In the normal course of trading during Wednesday these levels are unlikely to be triggered.

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Futures Recommendation

The composition and ranking of the top-10 tradable list had minor changes. ACC and BHEL gave way to Nalco and Ranbaxy. Nalco occupied third position and Ranbaxy occupied fifth position in the top10 tradable list while Infosys came down to sixth position. The top-3 tradable counters in this segment were Reliance, Tisco and Reliance Capital.

Most of the counters in the list are in downtrend. Five downtrend counters are likely to be under threat for Wednesday's trading. On the other hand, the lone uptrend counter Infosys is under threat for Wednesday's trading. There are ample buying opportunities and one selling opportunity exists for trading on Wednesday. The best is likely to be buying in Satyam. This counter is in downtrend. Bull move on Wednesday is likely to reverse the prevailing trend in this counter. The exit levels for ACC, BHEL and Tisco are placed at 830.05, 1854.05 and 494.05 respectively.

Cash Segment

The composition of the top-10 tradable list had no changes. However, the ranking of the list had minor changes. Maruti and Tisco moved up to third and fourth positions respectively while Infosys moved down to fifth position. All the counters in the list are in downtrend.

Four downtrend counters Maruti, Infosys, Satyam and Reliance capital are likely to be under threat for Wednesday's trading. There existfour buying opportunities. The best is likely to be buying in Satyam. This counter is in downtrend. Bull move on Wednesday is likely to initiate a fresh uptrend 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 technical analyst and fund management consultant.