TUESDAY'S market action resulted in reducing the bear count by a considerable margin. However, the sentiment reading of the tradeable counters remains bearish.
Bull move on Wednesday is likely to change the sentiment reading in their favour. Otherwise, the prevailing bearish sentiment is likely to be further strengthened.
Nifty futures recommendation: During the open, the near month April contract lost around three points. Later on, bulls took charge of the day's proceedings.
The April contract moved within a band of 27 points. It closed higher with a gain of 23 points over Monday's close.
Bull domination during the day led to the termination of the downtrend in the April contract. The short trade exited with a profit of 20 points.
Bullish trigger level for the April contract is placed just above the closing value. Bull pressure on Wednesday is likely to trigger the uptrend in the April contract.
Stock futures recommendation: The composition of the top-10 tradeable counters underwent a change. Union Bank gained entry with the exit of ONGC.
The ranking of the list had some changes. Infosys moved to the second position and Satyam moved to the fourth position.
Bull move on Wednesday could be a threat to most of the downtrend counters in the list. On the contrary, the uptrend in PNB is likely to be terminated. Bulls are likely to have opportunity in as much as nine counters.
Selling opportunities are likely to exist in two counters.
For Wednesday, the best is likely to be the buying in Union Bank. Buy level for this counter is placed very close to the current level.
Bull pressure on Wednesday is likely to initiate a fresh uptrend in Union Bank.
Cash segment: The composition of the top-10 active counters list had two changes. Infosys and Maruti gained entry with the exit of Andhra Bank and Bank of India. The ranking of the list too had some changes. The downtrend in Andhra Bank is likely to terminate at 108.05.
None of the counters in the list are in the uptrend.
Bull pressure on Wednesday is likely to terminate most of the downtrend counters in the list. Buying opportunities are likely to exist in all the 10 counters. Selling opportunities are likely to exist in three counters.
The best bet for Wednesday's trading is likely to be the buying in Tata Steel. This counter is in the sideways.
Bullish trigger level for this counter is placed within a rupee from the closing price. Bull move on Wednesday is likely to trigger the uptrend 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.