The Hindu Business Line : Bear domination

Monday’s trading activity witnessed bear domination. The sentiment reading of the tradable counters changed to bearish. Bull move on Tuesday is likely to change the sentiment reading in their favour. On the contrary, the prevailing bearish sentiment is likely to be strengthened with additional counters.

Nifty futures

The August month contract opened with a bear gap of around 81 points from its previous close. The August month contract moved within a range of around 78 points. The August month contract closed with a loss of 44 points from its previous close.

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Bear domination during the day initiated a fresh downtrend in the August month Nifty futures contract. The short exit and long entry levels are placed very near to its last traded price. These levels are likely to be triggered during Tuesday’s trading activity.

Stock futures

The composition of the top-10 tradable list had no changes. However, the ranking of the top-10 list had minor changes. Reliance Capital and SBI interchanged their positions. Hindalco and ICICI Bank interchanged their positions.

Except SBI all other counters in the list are in downtrend. Bull domination on Tuesday is likely to terminate all the downtrend counters except Hindalco. Buying opportunities are likely to exist in Reliance Industries, SBI, Reliance Capi tal, Reliance Energy, Tata Steel, ACC, IDBI, ICICI Bank and BHEL. The best is likely to be buying in BHEL. This counter is in downtrend. Bull move on Tuesday is likely to reverse the existing trend in this counter.

Cash segment

The composition and the ranking of the top-10 tradable list had minor changes. ACC made its way to top-10 list pushing out Hindalco. ACC occupied last position in the list. Reliance Energy, Infosys, SAIL, BHEL, Tata Steel and ITC moved one step higher in the list. SBI moved from sixth to fourth position. The short exit level for Satyam is placed at 464.75. The short exit level for Hindalco is placed at 172.55.

There are no uptrend counters in the list. Except Infosys, SBI, Tata Steel and ITC all other counters in the list are in downtrend. Bull domination on Tuesday is likely to terminate all the downtrend counters. Buying opportunities are likely to exist in Reliance Industries, Reliance Energy, SBI, Reliance Capital, SAIL, BHEL, Tata Steel, ITC and ACC. A lone selling opportunity is likely to exist in Infosys. The best among the above is likely to be selling in Infosys. This counter is in sideways mode. Bear move on Tuesday is likely to initiate a fresh downtrend in this counter.

(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.