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The breadth was slightly negative on Monday. An analysis of the numerical and capitalisation breadth shows that there was concentrated buying in index heavyweights, whereas the second-rung counters saw selling pressure. |
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Traded volumes were slightly lower compared with the 10-day average and that shows a firm commitment at higher levels. |
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For the market to commence a sustainable rally, the Nifty needs to close above 1425 levels and the Sensex above 4465 levels. |
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The upmove must be accompanied with heavy volumes and a highly positive breadth. |
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Currently, only the index front runners are running away whereas the side counters seem to have been stuck in a groove. |
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In case these levels are surpassed, expect the next level for the Nifty at 1465. On the lower side, expect short-term support to come at 1373 levels. |
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The outlook for Tuesday is of cautious optimism. The first half is likely to be bullish, but profit taking may set in at higher levels. |
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Technology, oil & gas and pharmaceutical sectors will continue to outperform and lead from the front, while cement and automobile sectors are likely to bring up the rear. |
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Should the overseas markets be firm, expect the outlook to be positive and downsides fairly limited. |
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Among stocks, ITC is attempting to make higher tops and is likely to accelerate the upmove especially if Rs 862 levels are surpassed on a closing basis. |
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In a bullish market, expect Rs 880 - Rs 885 levels as a fair probability. Buy in the cash and derivatives segments. |
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NIIT has closed at its highest levels since January 2003 and has managed to clear the 200-day SMA hurdle in the bargain. |
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The upward momentum is likely to continue especially if the software sector remains firm. Buy for the short term maintaining a stop-loss at Rs 147 and a target of Rs 162. Buying recommended in the cash and derivative segments. |
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Keep volumes lower as the markets are expected to be choppy. |
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Vijay Bhambwani |
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CEO, BSPLindia.com |
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The author is a Mumbai-based investment consultant and invites feedback at vijay@BSPLindia.com |
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Sebi disclosure: The analyst has no exposure to the scrips mentioned above. |
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