The Hindu Business Line : Bear domination

BEAR domination on Wednesday initiated the downtrend in most of the counters in the tradable list. The sentiment reading of the tradable counters stands bearish with no uptrend counters. Bull domination on Wednesday is likely to reduce the bear count by a substantial margin thereby neutralising the sentiment reading.

Nifty futures recommendation: The August contract opened six points lower than its previous close and steadily lost during the day's trading. The August contract moved within a band of 23 points registering an intra-day low of 1573.55. It closed with a loss of 17 points with respect to Tuesday's close.

Wednesday's market action resulted in reversing the uptrend in the August contract. The long trade exited with a loss of 16 points. In the normal course of trading on Thursday, the initiated short position is likely to continue. Bullish trigger level for the August contract is placed slightly far away.

Click here for table

Stock futures recommendation: The most active counters list remains intact. The ranking of the list underwent a change. ACC and ONGC interchanged their positions. Trading activity in Bank of Baroda was quite hectic on Wednesday with more than 1,650 trades.

For Thursday, the prevailing downtrend counters in the list are likely to be under threat. Selling opportunities are likely to exist in ACC, CNX IT and Tata Steel. Buying opportunities are likely to exist in ACC, CNX IT and ONGC. The best among the above is likely to be the selling in ACC. Bearish trigger level for this counter is placed within a rupee from its last traded price. Bear pressure on Thursday is likely to initiate the downtrend in ACC.

Cash segment: There were no new entries or exits to the top-10 active counters list. The ranking of the list had a minor change. Satyam moved to the eighth position and Infosys to the ninth position.

Bull pressure on Thursday is likely to terminate most of the prevailing downtrend counters in the list. Bears are likely to have opportunities in five counters. Buying opportunities are likely to exist in Infosys and ONGC. Selling in Tata Steel is likely to be the best bet for Thursday's trading. This counter is in the sideways mode and has closed at 260.85. Bear move on Thursday is likely to trigger the downtrend in Tata Steel.

(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.