Back Bear onslaught
K. Premkumar
BEARS extended their pressure over Tuesday's trading activity. Their dominance left the bull with no opportunity to recover.
The sentiment reading of the tradable counters stands extremely bearish with all the counters in the downtrend. Bull domination on Wednesday has the potential to reduce the bear count by a considerable margin.
Nifty futures recommendation: The near month January contract opened with a bull gap of five points and went further by another 10 points. Thereafter, bears took charge of the day's proceedings.
The January contract moved within a band of 41 points. It closed lower with a loss of around 20 points with respect to Monday's close.
The short position in the January contract remains undisturbed. The exit and bullish trigger levels for the January contract are still placed around the same level. In the normal course of trading on Wednesday, these levels are unlikely to be triggered.
Stock futures recommendation: The composition, as well as the ranking of the top-10 active counters list, remains unchanged. Infosys, Tata Steel and State Bank were the top-three traded counters in this segment.
The exit level for the downtrend in NTPC is placed at Rs 84.30.
Bull pressure on Wednesday is likely to terminate the downtrend in CNX IT, Maruti, Reliance and Tata Motors. Entry levels for all the counters are placed slightly away from the respective closing values. The nearest entry level among all the counters is for ONGC. Bull domination on Wednesday has the potential to reverse the prevailing downtrend in ONGC.
Cash segment: There were no new entries or exits to the top-10 tradable list. The ranking of the list too remains unchanged.
Bears were successful in initiating the downtrend in the recommended counter - Infosys.
Bull domination on Wednesday could be a threat to five out of the ten downtrend counters in the list.
Traders are left with a lone opportunity for Wednesday's trading as the bullish entry levels for most of the counters are placed far away.
The lone opportunity is likely to exist on the long side of Zee Tele. This counter is in the downtrend. The exit and bullish trigger levels for this counter is placed quite closer to its last traded price. Bull move on Wednesday is likely to reverse the prevailing downtrend in Zee Tele.
(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.
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