Back Bull run arrested
K. Premkumar
BEARS were successful to the extent of restricting the bulls from making further gains. The day's market action resulted in terminating a few uptrend counters. The sentiment reading of the tradable counters remains strongly bullish with no downtrend counters.
Bear domination on Wednesday has the potential to change the sentiment reading to bearish.
Nifty futures recommendation: During the initial hours of the day's trading, the February month contract lost around 15 points. Later on, bulls made a smart recovery and wiped out their early losses. The February contract moved within a band of 26 points. It closed with a loss of 5 points with respect to Monday's close.
The long position in the February contract remains undisturbed. The exit and bearish trigger levels for the February contract are placed at the same level. However, these levels are still placed far away.
Stock futures recommendation: The composition of the top-10 tradable list in this segment remains unchanged. The ranking of the list had some changes. Tata Steel moved to the top slot followed by Satyam and State Bank.
For Wednesday, most of the uptrend counters in the tradable list are likely to be under threat. Bears are likely to have opportunity in six counters. Buying opportunities are likely to exist in two counters.
Selling in Tata Motors is likely to be the best bet for Wednesday's trading. This counter is in the uptrend. The exit and bearish trigger levels for this counter is placed very close to its last traded value. Bear pressure on Wednesday is likely to trigger these levels.
Cash segment: There were no new entries or exits to the top-10 tradable list. The ranking of the list underwent a change. State Bank moved to the second position followed by Satyam and Reliance.
Bear pressure on Wednesday is likely to terminate most of the uptrend counters in the list. Selling opportunities are likely to exist in five counters. A lone buying opportunity is likely to exist in Maruti.
For Wednesday, the best is likely to be the selling in Canara Bank. This counter is in the sideways mode. Sell level for this counter is placed quite closer to its current level. Bear move on Wednesday is likely to trigger the downtrend in Canara Bank.
(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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