The Hindu Business Line : Initial gains lost

BULLS exerted further pressure during the initial hours of Tuesday's trading activity. Later on, bears gained control of the day's proceedings. Tuesday's market action resulted in reducing the bull count by a considerable margin.

The market sentiment reading of the tradable counters continues to remain bullish. Bear domination on Wednesday is likely to change the sentiment reading in their favour. Otherwise, the prevailing bullish sentiment is likely to be further strengthened.

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Nifty futures recommendation: During the open, the near month September contract gained 10 points. Thereafter, bears took over and recouped their early losses. The September contract moved within a band of 32 points. It closed with a loss of 10 points with respect to Monday's close.

Bears were successful in terminating the uptrend in the September contract. The long trade exited with a nominal profit of 12 points. In the normal course of trading on Wednesday, the sideways trend is likely to continue. However, bull domination has the potential to re-instate the uptrend in the September contract.

Stock futures recommendation: The composition of the top-10 tradable list in this segment underwent a change. ACC regained entry with the exit of i-flex Solutions. Reliance Industries moved to the seventh position followed by Ranbaxy and ACC.

The uptrend in i-flex is likely to be terminated at Rs 640.20.

Further bear dominance on Wednesday is likely to terminate the uptrend in CNX IT, Ranbaxy, Reliance Industries and State Bank. The lone downtrend counter Tata Steel is likely to be safe. Selling opportunities are likely to exist in Hindustan Petro, Ranbaxy and State Bank. Buying opportunities are likely to exist in ACC and Tata Steel.

The best among the above is likely to be the selling in Hindustan Petro. The counter is in the sideways mode. Its sell level is placed closer to its current level. Bear move on Wednesday is likely to trigger the level.

Cash segment: The top-10 tradable list in this segment had a change. Digital gained entry with the exit of Hexaware. The ranking of the list remains the same with no major changes.

The uptrend in Hexaware is likely to be terminated at Rs 208.60.

For Wednesday, the uptrend in Digital and Visual Soft is likely to be under threat. The prevailing downtrend counters in the list are likely to be safe. Bulls are unlikely to have any opportunities for Wednesday's trading. Selling opportunities are likely to exist in Hindustan Petro and State Bank. Between the two, the best bet is likely to be Hindustan Petro. Its bearish trigger level is placed very close to its last traded price. Bear pressure on Wednesday is likely to initiate a fresh downtrend 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.

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