The Hindu Business Line : Bearish sentiment prevails

Bears prevailed over Friday's trading activity. The sentiment reading of the tradable counters changed to bearish. Bull move on Friday is likely to change the sentiment reading to bullish. On the other hand, prevailing sentiment reading is likely to be further strengthened with additional counters.

Nifty Futures Recommendation

The July month contract opened with a bull gap of around 26 points from Thursday's last traded price. We have discarded 3258 high for our analysis. The July month contract moved with in a range of around 140 points making an intraday low of 3021.10. It closed with a loss of around 83 points from its previous close.

Bear move triggered the short position in July month contract. The short exit and long entry levels are placed quite far away from its last traded price. In the normal course of trading on Monday these levels are unlikely to be triggered.

Futures Recommendation

The composition of the top-10 tradable had no changes. However, ranking of the list underwent minor changes. Satyam Computers moved down to the last rank from the fourth rank. The top-3 tradable counters in this segment were Reliance, Tata Steel and Sterlite Industries.

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There are no uptrend counters in the list. Bull domination on Monday is likely to terminate the downtrend in Bajaj Auto. There are three selling and two buying opportunities for Monday's trading. The best is likely to be selling in Hindalco. This counter is in sideways mode. Bear move on Monday is likely to initiate fresh downtrend in this counter.

Cash Segment

The composition of the top-10 tradable list had minor changes. Tatamotors gained entry in the place of SAIL. The ranking of the list had no changes.

The lone uptrend counter VSNL is likely to be under threat for Monday's trading. However, all the short exit levels are placed far away for Monday's trading. There are no buying opportunities for Monday's trading. Selling opportunities are likely to exist in ITC and VSNL. The best among the above is likely to be selling in ITC. This counter is in side ways mode. Bear move on Monday is likely to initiate a fresh down trend in ITC.

(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.