The Hindu Business Line : Bear onslaught

BEARS were in total charge of Monday's trading. Their dominance left the bulls stranded. The sentiment reading of the tradable counters stands strongly bearish. Bull domination on Tuesday is likely to reduce the bear count by a considerable margin thereby neutralising the sentiment reading.

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Nifty Futures Recommendation: The October contract opened with a bear gap of nine points and steadily lost during the day's trading. The October contract moved within a band of 24 points. Bears capitalised the day's entire move as the October contract closed lower.

The downtrend in the October contract remains intact. The exit level for the short position is now locked up with a nominal profit of eight points. The exit and bullish trigger levels for the October contract are placed far away. In the normal course of trading on Tuesday, these levels are unlikely to be triggered.

Stock Futures Recommendation: The composition as well as the ranking of the top-10 tradable list remains unchanged. Reliance, Satyam and Tata Steel were the top three traded counters.

Most of the downtrend counters in the list are likely to be under threat for Tuesday. Bear pressure on Tuesday is likely to terminate the lone uptrend counter-Infosys. Bulls are likely to have opportunity in four counters. A lone selling opportunity is likely to exist in Infosys. The best bet is likely to be buying in Ranbaxy. The exit and bullish trigger levels for this counter are placed closer to its current level. Bull move on Tuesday is likely to trigger these levels.

Cash Segment: There were no new entries or exits to the top-10 tradable list. The ranking of the list had few changes. Tata Steel moved to the fourth position followed by Satyam and Maruti.

Except for Infosys, all the other counters in the list are in the downtrend. Bull pressure on Tuesday is likely to terminate five out of nine downtrend counters in the list. On the other hand, the lone uptrend counter-Infosys is likely to be under threat. Bears are unlikely to have any opportunity for Tuesday's trading. Buying opportunities are likely to exist in ONGC and Tata Steel. Between the two, the best is likely to be ONGC. Bull domination on Tuesday has the potential to reverse the prevailing downtrend in ONGC.

(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.