Distribution at higher levels

TECHNICALS

The markets opened on a bullish note, but ended off their intraday perches as 6005 proved to be a strong resistance level. The indices ended in the green, but there was clear lack of follow-up buying conviction at higher levels.

The market breadth was positive as the combined exchange figures were 2408:1553. The capitalisation of breadth was also positive as the commensurate figures were Rs 17,257 crore: Rs 14,360 crore. The F&O data indicated a 0.61 per cent increase in long positions amidst a marginal fall in the Nifty PCR.

The indices have closed at the lower half of the intraday range. The higher traded volumes indicate distribution at higher levels in the absolute short term. The closing on the daily charts is still at it's highest, which could be a consolation for the bulls. The market breadth indicated retail buying throughout the session.

The range for Friday will be 6025 on advances and 5885 on declines. The bulls will emerge stronger, provided the Nifty remains above the 5985 - 5990 band on higher volumes.

The outlook for Friday is that of guarded optimism as the weekend factor and overseas cues will impact the immediate sentiment. Avoid aggressive big ticket fresh buys.

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 no exposure to any scrip/s recommended above.