The Hindu Business Line : Bear domination

BEARS prevailed over Monday's trading activity. The sentiment reading of the tradable counters stands bearish. Bull pressure on Tuesday is likely to change the sentiment in its favour. On the contrary, the prevailing bearish sentiment is likely to continue with added strength.

Nifty Futures Recommendation: Initially the October contract gained around 12 points; thereafter bears took charge of the day's trading. The October contract moved within a band of 26 points registering an intra-day low of 1801.55. It closed with a loss of 6 points with respect to Saturday's close.

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Bull domination during the day led to the reversal of the uptrend in the October contract. The long trade exited with a profit of 25 points. In the normal course of trading on Tuesday, the initiated short position is likely to continue. However, bull domination has the potential to reverse the downtrend in October contract.

Stock Futures Recommendation: There were no new entries or exits to the top-10 tradable list. The top three traded counters in this segment were Tata Steel, ONGC and Reliance.

Bull move on Tuesday is likely to terminate most of the prevailing downtrend counters in the list. On the contrary, the uptrend in ONGC and Reliance is likely to be under threat. Bears are likely to have opportunity in Maruti and Tata Motors.

Buying opportunities are likely to exist in as much as seven counters. Selling in Maruti is likely to be the best bet for Tuesday's trading. Bearish trigger level for this counter is placed closer to its current level. Bear pressure on Tuesday is likely to trigger the downtrend in Maruti.

Cash Segment: The composition as well as the ranking of the top-10 active counters list remains undisturbed. Monday's market action resulted in triggering the downtrend in four counters of the tradable list.

Bear pressure on Tuesday could be a threat to the prevailing uptrend counters in the list. On the other hand, the prevailing downtrend counters in the list are likely to be terminated. Selling opportunities are likely to exist in three counters. Buying opportunities are likely to exist in six counters. Selling in Tata Motors is likely to be the best for Tuesday's trading. Bear domination on Tuesday is likely to initiate a fresh downtrend in Tata Motors.

(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.