The Hindu Business Line : Initial gains not held

BULLS extended their pressure during the initial hours of Tuesday's trading activity. Thereafter, bears made a strong comeback and recouped their early losses.

Tuesday's market action resulted in terminating a few uptrend counters in the tradable list. However, the sentiment reading of the tradable counters continues to remain bullish. Bears domination on Wednesday is likely to change the sentiment reading in their favour. Otherwise, the prevailing bullish sentiment is likely to be further strengthened.

Nifty Futures Recommendation: Initially the near month October contract moved by 10 points. Later on, bears gained control of the day's proceedings. The October contract moved within a band of 27 points. It closed with a loss of 10 points with respect to Monday's close.

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The long position in the October contract remains intact and this is unlikely to be disturbed. The exit and bearish trigger levels for the October contract are still placed around the same level.

Stock Futures Recommendation: The top-10 tradable list in this segment witnessed two changes. M&M and ONGC gained entry with the exit of Ranbaxy and Wipro. The ranking of the list remains the same with no major changes. The top three traded counters in this segment were Tata Steel, Satyam Computer and Tata Engineering.

Bull domination on Wednesday is likely to be a threat to the downtrend in CNX IT and Satyam Computer. In the case of bear domination, the uptrend in Hindustan Petro, ONGC and Reliance Industries is likely to be terminated. Selling opportunities are likely to exist in ONGC and Reliance Industries. Buying opportunities are likely to exist in CNX IT and Satyam Computer. The best among the above is likely to be Reliance Industries. This counter is in the uptrend. Its exit and bearish trigger level are placed closer to its current level. Bear move on Wednesday is likely to trigger these levels.

Cash Segment: The composition of the top-10 tradable list underwent a change. Tata Engineering gained entry with the exit of Lupin. The ranking of the list had some changes. Hindustan Petro moved to the second position followed by SAIL and Infosys.

Bull domination on Wednesday is likely to terminate the downtrend in Infosys and Satyam Computer. On the contrary, the uptrend in BPCL and Reliance Industries is likely to be under threat. Bears are unlikely to have any opportunity for Wednesday's trading. Buying opportunities are likely to exist in Hindustan Petro and Satyam Computer. Between the two, the best is likely to be Satyam Computer. Its buy level is placed quite closer to its last traded price. Bull domination on Wednesday has the potential to reverse the prevailing downtrend 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 Chennai-based technical analyst and fund management consultant.

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