Taking off after a shaky start, the indices recovered at the fag end of the session as bear-covering lifted values. As I had advocated recently, the end of the derivatives cycle overshadows the techno-fundamentals as traders focus on rollovers rather than technicals.
The market breadth was negative in spite of the upthrust as the retail segment preferred to unwind at higher levels. The BSE advance-decline ratio stood at 939:1,223. The traded volumes were subdued as the retail day traders kept to the sidelines.
The indices have closed at the upper end of the intraday range even as the market internals were negative and the turnover was insipid. These are indications of a weak upmove that is suspect in quality. Sustainability will require better participation and stronger internals from Thursday/Friday onwards.
The traded prices must stay above the weighted-average prices on higher volumes. The intraday range specified for Wednesday at 2,750-2,560 has held as the Nifty retraced from the 2,762-level. The coming session is likely to witness a range of 2,825 on advances and 2,670 on declines. The bullish trigger will be 2,720, above which the outlook will be favourable and bearish below the 2,690-level.
The outlook for the markets on Thursday is that of a range-bound movement. Much will depend on external triggers as expiry days are mostly anti-climactic days. Continue to abstain from big-ticket trades for now.
Vijay L Bhambwani
(Ceo - BSPLindia.com)
The author is a Mumbai based investment consultant