Above the congestion levels

TECHNICALS

The traded volumes were significantly lower than in Friday's session and that shows the retail participation is wanting.

The market breadth was negative as the ratio of advancing to declining shares on the Bombay Stock Exchange and the National Stock Exchange combined stood at 1298 : 1878 and the capitalisation of this breadth was Rs 2,761 crore: Rs 3,175 crore.

The indices have managed to close above the February congestion levels of 2080 and 6622 levels on the Nifty and Sensex, respectively. These levels are therefore a short-term floor for the markets in the coming session.

On the upsides, expect resistance at 2118 / 2124 and 6674 / 6685 levels on the Nifty and Sensex, respectively.

It is unlikely that the indices give any clear trend determining signal in the immediate term and players will have to exercise restrain in their investment / trading regimen.

Traded volumes and the open interest need to be watched closely for signs of short term trend determination. The outlook for the markets on Tuesday is that of abundant caution as the bulls are showing a preference for profit sales at higher levels and the bears are holding on to their short positions more or less.

Among shares, activity is likely to be seen in Bhel which is showing signs of strength even in a weak market.

Should the scrip manage to trade above Rs 802 levels for a major portion of the coming session, the short-term price target is likely to be Rs 815 levels in a conducive market.

Buying is recommended in small lots in the cash and derivatives segments.

Vijay L. Bhambwani
(CEO - BSPLindia.com)

The author is a Mumbai-based investment consultant and invites feedback at vijay@BSPLindia.com or(022) 23438482 / 23400345.

Sebi disclosure: the analyst has no exposure to the scrips mentioned above.