The Hindu Business Line : Narrow movement

BEARS managed to gain from Friday's range-bound activity. The sentiment reading of the tradable counters stands mildly bearish. Bull domination on Monday is likely to change the sentiment reading in their favour. On the contrary, the prevailing bearish sentiment is likely to continue with added strength.

Nifty futures recommendation: The near month August opened with a bear gap of 10 points. Thereafter, bulls made a valiant attempt to bridge the gap in the initial hour of the day's trading. However, during the close the bulls were marginalised. The August month contract moved within a close band of 14 points registering an intra-day low of 2345.60. It closed with a loss of around nine points with respect to Thursday's close.

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The uptrend in the August contract remains intact. The exit level for the long position is now placed closer to the last traded value. Bearish trigger level for the August contract has also been moved closer. Bear domination on Monday has the potential to reverse the prevailing uptrend in the August contract.

Stock futures recommendation: The composition as well as the ranking of the top-active counters list remains unchanged. Tata Steel, VSNL and Reliance were the top three traded counters in this segment.

For Monday, most of the counters in the list are likely to be under threat. Four opportunities are likely to exist in either side of trading. Selling in Polaris is likely to be the best for Monday's trading. This counter is in the uptrend. The exit and sell levels for this counter is placed closer to the current level. Bear move on Monday has the potential 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 some changes. Tata Steel moved to the fifth position followed by ONGC and State Bank.

Bull move on Monday is likely to terminate most of the uptrend counters in the list. On the other hand, the uptrend in State Bank, Tata Motors and VSNL are likely to be under threat. Buying opportunities are likely to exist in two counters. A lone selling opportunity is likely to exist in Tata Motors. The best among the above is likely to be the selling in Tata Motors. This counter is in the downtrend. Bear pressure on Monday has the potential to reverse the prevailing uptrend 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.

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