The Hindu Business Line : Bear onslaught

FOR the second successive trading day, bears had their total say over Tuesday's trading activity. This resulted in leaving the bulls stranded. The sentiment reading of the tradable counters stands absolutely bearish with no uptrend counters. Bull domination on Wednesday is likely to reduce the bear count without affecting the sentiment reading.

Nifty futures recommendation: Initially the near month February contract moved by 13 points. Later on, bears took over and wiped out their early losses. The intra-day movement in the February contract was around 65 points. It closed with a loss of 34 points with respect to previous close.

The day's move had no impact on the recommended levels. The exit level for the short position in the February contract is locked-up with a decent profit of 22 points. In the normal course of trading on Wednesday, the downtrend is likely to continue. Bullish trigger level for the February contract is placed far away and this is unlikely to be triggered.

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Stock futures recommendation: There were no new entries or exits to the tradable list. Tata Motors regained its top slot and ACC moved to the seventh position. Trading activity in ACC was quite hectic on Tuesday with more than 6300 trades.

Bull move on Wednesday is likely to terminate the downtrend in CNX-IT, Reliance and Tata Motors. Bear pressure prevailing in the market has placed the entry levels for all the counters at a far away level. The nearest entry level given is for the long side of Reliance. This counter is in the downtrend. Bull domination on Wednesday has the potential to reverse the prevailing trend in this counter.

Cash segment: The composition as well as the ranking of the top-10 tradable list remain intact. For Wednesday, the downtrend in Infosys, Reliance and Tata Motors is likely to be under threat. Traders having position in the above counters will have to be cautious.

Traders are left with a lone opportunity for Wednesday's trading. This is likely to exist on the long side of Tata Motors. This counter is in the downtrend. Its exit and bullish trigger levels are placed closer to its current level. Bull pressure on Wednesday is likely to reverse the 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.