Back Bears prevail
K. Premkumar
BEARS extended further pressure over Monday's trading activity. The sentiment reading of the tradable counters remains strongly bearish. Bull domination on Tuesday is likely to reduce the bear count by a considerable margin. However, the sentiment reading is unlikely to change.
Nifty futures recommendation: For the second successive trading day, the April contract opened with a bear gap. It opened 20 points lower and went further down by another 16 points. The April contract moved within a band of 23 points registering an intra-day high of 1922.95. It closed with a loss of 25 points over previous close.
The downtrend in the April contract remains intact. The short position is now locked-up with a decent profit of around 30 points. In the normal course of trading on Tuesday, the short position is unlikely to be disturbed. Bullish trigger level for the April contract is placed quite far away.
Stock futures recommendation: The composition of the top-10 tradable list underwent a change. ONGC gained entry with the exit of Cipla. The ranking of the list had some changes. Infosys moved to the top slot and Satyam moved to the fifth position. The exit level for the downtrend in Cipla is placed at 240.05.
All the counters in the list are in the downtrend. Bear pressure on Tuesday could be a threat to five out of the ten prevailing downtrend counters. Buying opportunities are likely to exist in Tata Motors and Union Bank. Between the two, the best bet is likely to be the buying in Tata Motors. The exit and bullish trigger levels for this counter is placed quite closer to the current level. Bull move on Tuesday has the potential to reverse the prevailing downtrend in Tata Motors.
Cash segment: There were no new entries or exits to the top-10 active counters list. The ranking of the list had few changes. Tata Steel moved to the first position followed by Reliance and Infosys.
Bear move on Tuesday is likely to terminate most of the downtrend counters in the list. On the other hand, the lone uptrend counter — Maruti is likely to be under threat. For Tuesday, a lone opportunity is likely to exist on the long side of Tata Motors. This counter is in the sideways mode. Buy level for this counter is placed closer to the last traded price. Bull pressure on Tuesday is likely to trigger the uptrend in Tata Motors.
(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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