Bulls showing signs of reticence

TECHNICALS

The markets opened on a positive note and proceeded to trade lower through the day. The benchmark indices drifted lower as absence of buying support caused a gradual slide.

Traded volumes were expectedly poor as retail participation was conspicuous by it's absence. The market breadth was highly negative as the BSE and NSE combined figures were 1339: 1906 and the capitalisation of the breadth was positive as the figures on a BSE & NSE combined basis were Rs 3616 crore: Rs 3168 crore.

The indices have retraced from their intra-day highs and exhibited key reversal days as the closing is lower than the opening, and the intra-day highs were significant highs of the current move.

Barring the Bank Nifty, all major indices have slumped. The intraday high for Tuesday was projected at 3179 level which was accurate as the Nifty scaled the 3177 level and ended lower.

The coming session will see levels of 3109.55 on declines and 3167.75 as the levels to watch out for. A breakout / breakdown beyond these levels with high volumes will signal extended moves.

The outlook for the markets on Wednesday is that of caution as bulls are showing signs of reticence and only a sustained buying momentum will lift up values sustain ably. Stock specific activity is likely to be seen in Dr Reddy's.

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.

Mandatory disclosure - the analyst has exposure to the scrips mentioned above.