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Nifty turns sideways

K. Premkumar

THE bulls dominated the day's proceedings on Tuesday. Bears were unable to extend their pressure during the day's trading. This resulted in the termination of the downtrend in the index.

The movement in Nifty was around 19 points. Bulls gained around 10 points from the day's trading with respect to Monday's close. The market sentiment reading of the tradable counters stands neutral.

For Wednesday, the sideways trend in the index is likely to continue in the normal course of trading. Bear domination has the potential to reinstate the downtrend in the index.

The bullish trigger level is still placed far off and is unlikely to be triggered. Bull domination would change the prevailing sentiment to bullish. Else it is likely to remain the same.

Index futures recommendation: Tuesday's volume in the futures segment was quite impressive. The cumulative volume crossed five lakh, of which around four lakh was accounted in the nearby July contract.

The movement in the July futures contract was around 15 points. It closed with a gain of 12 points with respect to Monday's close. Bull domination during he day led to the initiation of a fresh uptrend, terminating the downtrend in both the styles of tra ding. In the normal course of trading, the uptrend is likely to continue on Wednesday.

Scrip recommendation: The composition and the ranking of the top-20 tradable list remained intact.

The market sentiment reading of the tradable counters changed to neutral. In case of bull domination on Wednesday, the sentiment is likely to switch in favour of the bulls.

Further bull pressure on Wednesday could be a threat to the following downtrend counters -- Reliance Industries, Saw Pipes and Zee Tele.

The uptrend in ACC is likely to be under threat in case of a bear move. So, traders holding positions in these counters will have to be careful during Wednesday's trading.

Buying opportunities for the bulls are likely to exist in Global Tele, Saw Pipes and State Bank of India. Selling opportunities for the bears is likely to exist in ACC, Satyam Computer and SSIL.

The best bet for Wednesday's trading is likely to be the selling in SSIL. The counter at present is in the sideways mode. Its exit and bearish trigger levels are placed quite closer to its last traded value. Bear pressure on Wednesday has the potential t o trigger these levels.

(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 Chennai-based technical analyst and fund management consultant.