The Hindu Business Line : Bear domination

BEARS were in total command of Friday's trading activity. The sentiment reading of the tradable counters stands strongly bearish with no uptrend counters. Irrespective of bull or bear domination on Monday, the prevailing bearish sentiment is likely to continue with a slight change in the value.

Nifty futures recommendation: The near month May contract opened six points lower and went further down by another 33 points. Bulls were unable to make any impact during the day's trading. The May contract closed with a loss of 33 points with respect to Thursday's close.

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Bear domination during the day led to the initiation of the downtrend in the May contract. In the normal course of trading on Monday, the initiated short position is unlikely to be disturbed. Bullish trigger level for the May contract is still placed far away.

Stock futures recommendation: The composition of the top-10 active counters list had two changes. PNB and Polaris gained entry with the exit of ONGC and Tata Motors. The ranking of the list too had some changes. The exit level for the downtrend in ONGC and Tata Motors is placed at Rs 834.05 and Rs 424.30 respectively.

All the counters in the list are in the downtrend. For Monday, the downtrend in Infosys, Tata Steel and Wipro is likely to be under threat. Traders are left with a lone opportunity for Monday's trading.

This is likely to exist on the long side of Infosys. The exit and buy level for this counter is placed quite closer to the current level. Bull move on Monday has the potential to reverse the prevailing downtrend in Infosys.

Cash segment: The composition as well as the ranking of the top-10 tradable counters remain intact. Friday's market action resulted in initiating the downtrend in Satyam.

Bull move on Monday is likely to terminate the downtrend in Maruti and Tata Steel. Selling opportunities are likely to exist in four counters. Buying opportunities are likely to exist in two counters.

The best bet for Monday's trading is likely to be the selling in Wipro. Bearish trigger level for this counter is placed within a rupee from the last traded price. Bear pressure on Monday is likely to trigger the downtrend in Wipro.

(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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