The Hindu Business Line : Bull domination

BULLS gained control of Tuesday's trading activity. The sentiment reading of the tradable counters stands bullish. Bear move on Wednesday is likely to reduce the bull count by a considerable margin thereby changing the sentiment reading to bearish. Otherwise, the prevailing sentiment is likely to be further strengthened.

Nifty futures recommendation: During the initial hour of the day's trading, the December month contract lost five points. Bears failed to capitalise on it as they yielded to bull pressure. The December contract moved within a band of 24 points. It closed with a gain of 17 points over previous close.

Click here for table

Bull domination during the day led to the reversal of the short position in the December contract. The short trade exited with a loss of 19 points. In the normal course of trading on Wednesday, the initiated long position is likely to continue. Bearish trigger level for the December contract is placed quite far away.

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

None of the counters in the list are in the downtrend. Bear domination on Wednesday could be a threat to the prevailing uptrend counters in the list. Bulls are likely to have opportunity in three counters. Selling opportunities are likely to exist in six counters. Buying in ONGC is likely to be the best bet for Wednesday's trading. Bullish trigger level for this counter is placed very close to its current level. Bull pressure on Wednesday is likely to trigger the uptrend in ONGC.

Cash segment: The top-10 active counters list underwent a change. Canara Bank gained entry with the exit of ONGC. The ranking of the list had a change. Maruti and SAIL interchanged their positions.

Bear move on Wednesday is likely to terminate the prevailing uptrend counters in the list. On the other hand, the lone downtrend counter - Reliance is likely to be under threat. Selling opportunities are likely to exist in four counters. A lone buying opportunity is likely to exist in Satyam. Selling in Satyam is likely to be the best for Wednesday's trading. Bear move on Wednesday is likely to initiate a fresh downtrend in Satyam.

(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.