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K. Premkumar

BEARS prevailed over the Monday's trading activity. The sentiment reading of the tradable counters turned bearish. Bull pressure on Tuesday is likely to neutralise the sentiment reading. On the contrary, the prevailing bearish sentiment is likely to continue with additional strength.

Nifty futures recommendation: The near month August contract gapped down by around 5 points. But, bulls managed to close the gap in the initial move. However, bulls were not able to sustain their momentum and gave way to the bears.

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Bears never looked back and made further move down by another 35 points during the day. It closed with a loss of around 40 points with respect to Friday's close.

The bear move during the day initiated downtrend in the August contract. The exit & bullish trigger level for the August contract is placed quite near. Bull domination on Tuesday has the potential to reverse the prevailing downtrend in the August contract.

Stock futures recommendation: The composition of the top-10 list had a minor change. Ranbaxy gained entry in the place of NTPC. Ranking of the list remains unchanged. The top three traded counters in the segment were Reliance Industries, VSNL and Tata Steel. The exit level for the downtrend in NTPC is placed at 98.15.

All the uptrend counters in the list are likely to be under threat for Tuesday's trading. On the other hand, Infosys and Satyam are likely to be terminated. Almost five opportunities are likely to exist on bearish side while only two opportunities exist on the bull side.

Selling in ONGC is likely to be the best for Tuesday's trading. This counter is in the sideways mode. The exit and bearish trigger levels for this counter is placed quite nearer to its last traded price. Bear domination on Tuesday has the potential to trigger downtrend in ONGC.

Cash segment: The composition as well as the ranking of the top-10 tradable counters list remains unchanged. Except for Tata Motors all the other downtrend counters in the list are likely to be under threat for Tuesday's trading.

On the contrary, the lone uptrend counter Tata Steel is likely to be terminated on Tuesday. Four opportunities on the buy side and five opportunities on the sell side are likely to exist for Tuesday's trading.

The best among the above is likely to be the selling in Reliance Industries. This counter is in sideways mode. Bear pressure on Tuesday is likely to initiate fresh downtrend in Reliance Industries.

(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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