The Hindu Business Line : Bulls gain

BULLS gained control of the initial hours of Tuesday's trading. Their initial pressure led to the termination of most of the downtrend counters in the tradable list. The sentiment reading of the tradable counters stands bullish. Bear domination on Wednesday is likely to change the sentiment reading in their favour. On the contrary, the prevailing bullish sentiment is likely to be further strengthened.

Nifty futures recommendation: The August contract opened with a bull gap of six points and went further by another 8 points. Bulls failed to capitalise on it as they yielded to bear pressure. The August contract moved within a band of 21 points. It closed with a loss of 6 points with respect to the previous close.

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Initial bull move led to the reversal of the uptrend in the August contract. The short trade exited with a nominal profit of 12 points. The exit level for the initiated long position is placed very close to its last traded value. Bear pressure on Wednesday is likely to terminate the uptrend in the August contract.

Stock futures recommendation: The composition as well as the ranking of the top-10 tradable list remains unchanged. Tata Steel, Reliance and Tata Motors were the top three traded counters in this segment.

Except for the downtrend in Tata Motors, all the other counters in the list are likely to be under threat. Bears are likely to have an opportunity in as many as eight counters. Buying opportunities are likely to exist in three counters. Selling in Satyam is likely to be the best for Wednesday. This counter is in the uptrend. The exit and sell levels for this counter is placed quite closer to its current level. Bear move on Wednesday has the potential to trigger these levels.

Cash segment: There were no new entries or exits to the top-10 active counters list. The ranking of the list too remains intact. Most of the counters in the list are in the uptrend.

Bear domination on Wednesday is likely to terminate most of the uptrend counters in the tradable list. On the other hand, the lone downtrend counter-M&M is likely to be under threat. Selling opportunities are likely to exist in seven counters. Buying opportunities are likely to exist in four counters. For Wednesday, the best bet is likely to be the selling in Infosys. Bearish trigger level for this counter is placed within seven rupees from its closing price. Bear pressure on Wednesday is likely to initiate a fresh downtrend in Infosys.

(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.