Back Initial gains not held
K. Premkumar
BULLS exerted pressure over the initial hours of Monday's trading activity but lost their grip during the fag end of the day's trading. The sentiment reading of the tradable counters remains bullish. Bear domination on Tuesday is likely to change the sentiment reading to bearish. On the contrary, the prevailing bullish sentiment is likely to be strengthened.
Nifty futures recommendation: The near month February contract opened with a bull gap of 15 points and went further by another 10 points. Later on, bears made a strong comeback and wiped out their losses. The February contract moved within a band of 27 points. It closed just a point over Friday's close.
The long position in the February contract remains intact. However, this is likely to be under threat for Tuesday. The exit level is placed within nine points from its last traded value. Bearish trigger level has also been moved closer to its current level. Bear domination on Tuesday has the potential to reverse the prevailing uptrend in the February contract.
Stock futures recommendation: The composition of the top-10 tradable list remains unchanged. The ranking of the list underwent a change. Satyam and State Bank interchanged their positions. The top three traded counters in this segment were Tata Steel, State Bank and Reliance.
Bear pressure on Tuesday is likely to terminate most of the uptrend counters in the list. On the other hand, the lone downtrend counter - Gujarat Ambuja Cement is likely to be under threat. Selling opportunities are likely to exist in five counters. Buying opportunities are likely to exist in three counters. The best bet is likely to be the selling in Reliance. Sell level for this counter is placed quite closer to its current level. Bear move on Tuesday is likely to trigger the downtrend in Reliance.
Cash segment: There were no entries or exits to the top-10 tradable list. The ranking of the list too remains unchanged. Monday's market action resulted in initiating the downtrend in the recommended counter - Canara Bank.
Bear move on Tuesday could be a threat to most of the uptrend counters in the list. On the contrary, the downtrend in ACC and State Bank are likely to be terminated.
Selling opportunities are likely to exist in four counters. Buying opportunities are likely to exist in two counters. For Tuesday, the best is likely to be the selling in Reliance. This counter is in the sideways mode. Bearish trigger level for this counter is placed within a rupee from its closing price. Bear pressure on Tuesday is likely to initiate the downtrend in Reliance.
(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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