High volumes inspire confidence

TECHNICALS

The markets clocked an uptick session as the bulls overpowered the bears. The traded volumes spiked higher than the previous session.

The market breadth was positive as the combined exchange figures were 2708:1417. The capitalisation was also positive as the commensurate figures were Rs 24632 crore:Rs 9013 crore.

The indices closed at the upper end of the intraday range. Technically speaking, the session is classified as an "outside day" formation because the range was beyond the previous session and the intraday high was a new Delta high - both positive indicators.

The coming session is likely to witness an intraday range of 6260 on advances and 6100 on declines. The 6100 level is fast emerging as a litmus test for the bulls, which needs to be defended zealously. Watch the traded volumes above the 6200 in case of an upmove. Higher volumes will imbibe fresh confidence.

The market internals indicate a higher turnover as the participation levels rose. The number of trades perked up, but the average ticket size was higher, indicating buying by stronger hands.

The outlook for the markets on Thursday is that of continued optimism. Should the overseas cues be firm, expect some more buying in the absolute near term. Refrain from short sales for now.

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.