The Hindu Business Line : Bear domination

BULLS maintained their pressure during the initial hours of Tuesday's trading. During the wee hours of the day's trading bears made a smart recovery and gained control of further proceedings. This resulted in terminating most of the uptrend counters in the list.

However, the sentiment reading of the tradable counters remains mildly bullish. Further bear dominance on Wednesday is likely to turn the sentiment reading in their favour.

Nifty Futures Recommendation: The near month January contract opened with a bull gap of 7 points and went further by another 11 points. Bulls failed to capitalise on it. Bears made a strong come back and dominated the proceedings in the later part of the day. The intra-day movement was around 53 points. The January contract closed with a loss of 32 points with respect to previous close.

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Bear domination during the day led to the termination of the uptrend in the January contract. The long position exited with a profit of 122 points. Both the bullish and bearish trigger levels are placed quite far away. In the normal course of trading on Wednesday, these levels are unlikely to be triggered.

Stock Futures Recommendation: The composition of the top-10 tradable list had a change. Hind Petro gained entry in place of Maruti. The ranking of the list too had changes. GAIL moved to second place pushing Reliance Industries to fourth place. ACC and ONGC interchanged their positions. The exit levels for the short positions in Maruti and Ranbaxy are placed at 387.05 and 1128.05 respectively.

Bear domination on Wednesday is likely to be a threat to the uptrend in ACC, Hind Petro and ONGC. However, both the downtrend counters are likely to remain safe. Hind Petro and Tata Steel are likely to have selling opportunities. Buying opportunities are unlikely to exist for Wednesday's trading. Selling in Hind Petro is likely to be the best for Wednesday's trading. Its sell level is placed quite nearer to its last traded price. Bear move on Wednesday is likely to reverse the prevailing uptrend in this counter.

Cash Segment: The composition of the top-10 tradable list in this segment underwent a change. Hind Petro gained entry while Polaris moved out of the list. State Bank occupied seventh place followed by ONGC, BPCL and Hind Petro. The exit level for the downtrend in Ranbaxy is placed at 1114.05.

The uptrend in Hind Petro and Infosys are likely to be under threat for Wednesday. There is unlikely to be any threat to the downtrend counters in the list. Bulls are unlikely to have any opportunity for Wednesday's trading. Selling opportunities are likely to exist in Hind Petro and ONGC. The best bet for Wednesday's trading is Hind Petro. This counter is in the uptrend. Its exit and bearish trigger levels are placed closer to its current level. Bear pressure on Wednesday is likely to reverse the prevailing trend 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.