| The benchmark indices gained over 1.5 per cent as the bulls managed to extend the previous day's gains as I had advocated yesterday. The traded volumes were marginally lower than the previous session as the upsides saw mild scepticism. |
| The weekend factor also kept enthusiasm levels suppressed. The market breadth was positive as the BSE and NSE combined figures were 1796:1591 and the capitalisation of the breadth was also positive. |
| The F&O data for the previous session indicated a near 70 per cent rollover on a higher base effect, which is a positive indicator. |
| The indices have closed at the upper end of the intra-day gains, that too on a weekend. That the market breadth was positive and the traded volumes were higher than the 10-day average are positive indicators on a stand-alone basis. The 3704 level advocated as a resistance for Friday was convincingly overcome as the Nifty has closed above our threshold level of 3710 and it is the highest since May 11, 2006. The intra-day high of Nifty at 3747 is higher than the previous significant high of 3742 of October 17, 2006, which indicates a bullish flag formation on the hourly charts. |
| The price / volume action confirms this formation and the outlook is bullish for the coming session. The intra-day levels for the coming session will be at 3784 on advances in case of an extended upmove and 3694 on declines in case of a corrective fall. The bias so far appears to be on the upside. |
| The outlook for the markets on Monday is that of continued optimism as the bulls are appearing to be in command and are unlikely to yield ground in the absolute near term. |
| A bear squeeze is likely to keep the downsides capped as the Nifty prepares to attack the all-time high in the coming weeks. I advocate traders to go with the flow and desist from going short at current levels. Vijay L. Bhambwani |
| Mandatory disclosure - the analyst has no exposure to the scrips mentioned above. |
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