The Hindu Business Line : Bears march ahead

BEARS extended their pressure over Tuesday's trading activity. The sentiment reading of the tradeable counters stands strongly bearish. Bull domination on Wednesday is likely to change the sentiment reading in their favour. Otherwise, the prevailing sentiment is likely to continue with added strength.

Nifty futures recommendation: The near month September contract opened around its previous close and steadily lost during the day's trading. Bulls were unable to make any impact on the day's activity. The September contract moved within a band of 18 points. It closed with a loss of around 13 points with respect to Monday's close.

Click here for table

Bears were successful in triggering the downtrend in the September contract. In the normal course of trading on Wednesday, the initiated short position is likely to continue. However, bull domination on Wednesday has the potential to reverse the downtrend in September contract.

Stock futures recommendation: The top-10 tradeable list in this segment underwent a change. ACC gained entry with the exit of ONGC. The ranking of the list remains the same with no major changes. The uptrend in ONGC is likely to be terminated at 725.90.

None of the counters in the list are in the uptrend. Except for the downtrend in Maruti, all the other counters in the list are likely to be under threat. Buying opportunities are likely to exist in six counters. A lone selling opportunity is likely to exist in Reliance. Buying in Reliance is likely to be the best bet for Wednesday's trading. Bullish trigger level for this counter is placed quite closer to its current level. Bull move on Wednesday is likely to initiate a fresh uptrend in Reliance.

Cash segment: The composition as well as the ranking of the top-10 tradeable list remains unchanged. Tuesday's market action resulted in triggering the downtrend in Infosys.

Bull domination on Wednesday could be a threat to the prevailing downtrend counters in the list. On the contrary, the uptrend in SAIL and Tata Steel are likely to be terminated. Bears are likely to have opportunity in three counters. Buying opportunities are likely to exist in five counters. Selling in Tata Steel is likely to be the best for Wednesday's trading. This counter is in the uptrend. The exit and bearish trigger levels are placed closer to its last traded price. Bear pressure on Wednesday is likely to reverse the prevailing uptrend in Tata Steel.

(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.