The Hindu Business Line : Bears prevail

INITIAL hours of bear domination on Monday changed the sentiment reading of the tradable counters to bearish. However, even a mild bull pressure on Tuesday could neutralise the sentiment reading. Bull domination on Tuesday could change the sentiment reading to bullish.

Nifty futures recommendation: The August contract opened with a bear gap of 6 points and went further down by another 12 points. Later on bulls made a strong comeback and wiped out their losses. The August contract moved in a band of 32 points. It closed with a gain of 8 points with respect to Friday's close.

Initial bear move led to the reversal of the uptrend in the August contract. The long trade exited with a loss of 18 points. The exit level for the initiated short position is placed very close to its current level. Bullish trigger level for the August contract is also placed closer. Bull domination on Tuesday has the potential to reverse the downtrend in the August contract.

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Stock futures recommendation: The top-10 tradable counters in the tradable list underwent a change. Maruti regain entry with the exit of Infosys. The ranking of the list had some changes. Satyam moved to the fourth position followed by State Bank and M&M.

The exit level for the downtrend in Infosys is placed at Rs 1,550.85.

Except for the uptrend in Wipro, all the other counters in the list are likely to be under threat. Buying opportunities are likely to exist in as much as six counters. A lone selling opportunity is likely to exist in Satyam.

The best bet for Tuesday's trading is likely to be the buying in State Bank. Buy level for this counter is placed within a rupee form its closing price. Bull pressure on Tuesday is likely to initiate a fresh uptrend in this counter.

Cash Segment: The most active counters list in this segment remains intact. The ranking of the list had a minor change. M&M and Satyam interchanged their positions.

Bull pressure on Tuesday is likely to terminate most of the downtrend counters in the tradable list. On the contrary, the uptrend in Tata Steel is likely to be under threat.

Bulls are likely to have opportunity in six counters. Selling opportunities are likely to exist in two counters.

Buying in State Bank is likely to be the best for Tuesday's trading. Bullish trigger level for this counter is placed closer to its current level. Bull move on Tuesday has the potential to trigger the uptrend in State Bank.

(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 technical analyst and fund management consultant.