The Hindu Business Line : Bear domination

The sentiment reading of the tradable counters remains strongly bearish. Bull domination on Wednesday is likely to reduce the bear count by a considerable margin, thereby changing the sentiment reading.

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Nifty Futures Recommendation During the opening, the August month contract gained around six points. Bulls failed to capitalise on it, as they yielded to the underlying bear pressure. The August contract moved within a band of 49 points, registering an intra-day low of 2323.15. It closed with a substantial loss of 35 points. The short position in the August contract remains intact. The exit and bullish trigger levels for the August contract are placed far away. On Wednesday, these levels are unlikely to be triggered.

Stock Futures Recommendation The composition of the top-10 active counters list remains intact. The ranking of the list had a minor change. i-flex and TCS interchanged their positions. Those still holding short positions in Bank of India, ICICI Bank and REL may put a stop loss at 131.45, 498.05 and 604.55 respectively.

Bull pressure on Tuesday could be a threat to four of the eight downtrend counters in the list. On the contrary, the lone uptrend counter — ACC — is likely to be terminated. Selling opportunities are likely to exist in ACC and TCS. Buying opportunities are likely to exist in Infosys, ONGC and TCS. The best option among the above is likely to be selling in TCS. The bearish trigger level for this counter is placed below a rupee from the last traded value. Bear pressure on Wednesday is likely to initiate a fresh downtrend in TCS.

Cash Segment The composition as well as the ranking of the top-10 tradable list remain undisturbed. Tuesday's market action triggered the downtrend in Satyam. Most of the counters in the list are in the downtrend. Bull pressure on Wednesday is likely to terminate the downtrend in Tata Motors. For Wednesday, opportunities are likely to exist in Infosys on either side of trading. The sell level for Infosys is placed quite close to the current level. A bear move on Wednesday has the potential to initiate the downtrend in Infosys.

(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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