The Hindu Business Line : Bear rampage

THE sentiment reading of the tradable counters stands absolutely bearish. Irrespective of bull or bear domination on Tuesday, the strong bearish sentiment is likely to continue.

Nifty futures recommendation: The May month contract opened with a bear gap of 16 points and thereafter fell drastically leaving the bulls totally stranded. The May contract registered a freak low of 1258.80 which was the lower band freeze level of 20per cent.

This freak low has been discarded and 1310 has been considered as the day's low for our analysis. The May contract closed with a whopping loss of 235 points.

The short position in the May contract is locked-up with a substantial profit of 170 points. The exit and bullish trigger levels are placed far away from its current level. In the normal course of trading on Tuesday, these levels are unlikely to be triggered.

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Stock futures recommendation: The composition of the top-10 tradable list underwent changes. GAIL and ONGC gained entry with the exit of HPCL and Satyam. The top three traded counters in this segment were Reliance, Tata Steel and Maruti. The exit level for the downtrend in HPCL, Infosys and Satyam are placed at 320.85, 4722.25 and 306.20 respectively.

Strong bear pressure prevailing in the market has placed the exit and bullish trigger levels for all the counters at a far away level. The nearest entry level is given for ACC. However, its buy level is placed above 18 per cent from its closing value.

Cash segment: The composition of the top-10 tradable list in this segment had some changes. GAIL and HPCL gained entry with the exit of Infosys and Power Trade Corp. State Bank moved to the fourth position followed by Tata Steel and ONGC. The downtrend in Canara Bank, Infosys and Power Trade Corp are placed at 134.05, 4925.50 and 43.50 respectively.

The prevailing downtrend counters in the list are likely to be safe. Exit and bullish trigger levels for all the counters are placed far away. The nearest bullish trigger level is for Satyam. This counter's bullish trigger level is placed around 8 per cent from its last traded value. Strong bull domination on Tuesday has a weird chance of reversing the prevailing downtrend in Satyam.

(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.