The Hindu Business Line : Initial gains not held

The sentiment reading of the tradable counters remains bullish. Bear pressure on Wednesday is likely to change the sentiment reading in their favour. Otherwise, the prevailing bullish sentiment is likely to be further strengthened.

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Nifty futures recommendation: During the morning session of Tuesday's trading, the August contract gained nine points. Thereafter, bears took charge of the day's trading and wiped out their early losses. The August contract moved within a band of 23 points registering an intra-day low of 1,620. It closed with a loss of five points with respect to previous close.

The long position in the August contract remains intact. However, this is likely to be under threat for Wednesday. The exit level for the long position is locked up with a nominal profit of 12 points. Bearish trigger level for the August contract has also been moved closer. Bear domination on Wednesday has the potential to reverse the prevailing uptrend in the August contract.

Stock futures recommendation: The most active counters list in this segment remains unchanged. The top three traded counters were Tata Steel, Tata Motors and Reliance.

None of the counters in the list are in the downtrend. Bear pressure on Wednesday could be a threat to the uptrend in ONGC, Satyam and Tata Steel. Selling opportunities are likely to exist in as much as seven counters. Buying opportunities are likely to exist in four counters. The best bet is likely to be the selling in M&M.

Bearish trigger level for this counter is placed very close to its current level. Bear pressure on Wednesday is likely to trigger the downtrend in this counter.

Cash segment: There were no new entries or exits to the top-10 tradable counters in this segment. The ranking of the list had a minor change.

Satyam moved to the ninth position followed by M&M.

Bear domination on Wednesday is likely to terminate the uptrend in ONGC, Reliance and Tata Steel. On the contrary, the lone downtrend counter - Maruti is likely to be under threat. Bears are likely to have opportunity in ONGC, M&M, State Bank of India and Tata Motors. Buying opportunities are likely to exist in Maruti, State Bank of India and Tata Motors.

Selling in M&M is likely to be the best for Wednesday's trading. Its sell level is placed within Rs 2 from its closing price. Bear move on Wednesday is likely to initiate a fresh downtrend in M&M.

(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.