The Hindu Business Line : Bears prevail

BEARS gained control of Monday's trading activity. The day's market action resulted in reducing the bull count by a considerable margin. However, the sentiment reading of the tradable counters continues to remain bullish. Further bear pressure on Tuesday is likely to turn the sentiment reading to bearish. Otherwise, the prevailing sentiment is likely to continue with a slight change in its value.

Nifty Futures Recommendation: The February month contract opened with a bull gap of 12 points but failed to capitalise on it. Bears were in total command of the day's proceedings. The February contract moved within a band of 41 points registering an intra-day low of 2056. It closed lower with a loss of 25 points with respect to Friday's close.

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The long position in the February contract remains undisturbed. The exit and bearish trigger levels for the February contract remain unchanged. These levels are still placed far away and unlikely to be triggered on Tuesday.

Stock Futures Recommendation: The composition as well as the ranking of the top-10 tradable counters remains intact. Tata Steel, Infosys and NTPC were the top three traded counters in this segment.

Bear move on Tuesday could be a threat to most of the prevailing uptrend counters in the list. On the other hand, the lone downtrend counter-Infosys is likely to be terminated. Selling opportunities are likely to exist in six counters. Buying opportunities are likely to exist in two counters. The best is likely to be the selling in Satyam. This counter is in the uptrend. The exit and bearish trigger levels for this counter are placed closer to its last traded value. Bear pressure on Tuesday is likely to reverse the prevailing uptrend in Satyam.

Cash Segment: There were no new entries to the top-10 tradable list. The ranking of the list too remains unchanged. Monday's market action resulted in initiating the downtrend in the recommended counter-Canara Bank.

Except for the downtrend in Canara Bank and Infosys, all the other counters in the list are likely to be under threat. Bears are likely to have opportunity in five counters. Buying opportunities are likely to exist in three counters. Selling in Reliance is likely to be the best bet for Tuesday's trading. Bear move on Tuesday has the potential to reverse the prevailing uptrend in Reliance.

(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.

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