The markets shrugged off strong negative overseas cues and rallied as was advocated yesterday.
The morning attack pulled off by the bulls was a logical follow up after the “bull shakeout” pattern, especially after the bullish pivot advocated yesterday was overcome on the Nifty spot.
The benchmark indices gained 5 per cent at close. The traded volumes were higher as compared to the previous session, which is a positive indicator. The market breadth was marginally negative as the BSE & NSE combined advance decline ratio was 1177 : 1293.
The indices have closed at the upper end of the intraday range and that too on higher volumes, which raises the probability of a follow up upmove on Monday. The validation of the bullish indications of the previous session may result in a swing reversal upthrust as per the Japanese ichimoku Kinko Hyo charts.
Followers of this system will use the “chikou span” indicator as a support for the coming session. The intraday range advocated for Friday at the 2,725 / 2,520 has held as the Nifty scaled the 2,719 levels which coincide with the “Tenkan sen” indicator. The coming session is likely to witness a range of 2,830 on advances and 2,590 on declines.
As long as the Nifty spot remains above 2,650, the upmove may extend on Monday. Volumes and open interest need watching in the expiry week.The outlook for the markets is that of optimism, subject to overseas cues being neutral to positive. Avoid the temptation to press fresh shorts.
Vijay L Bhambwani
(CEO - BSPLindia.com)
(He is a Mumbai-based investment consultant)