| Today's fall was the largest in the last four years and the fact that the indices have closed near their intra-day lows underline the weak sentiment. |
| The traded volume was steady and the market breadth ratio on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) was at 358:2,149. |
| The capitalisation of the breadth was also negative with the combined ratio on the BSE and NSE at Rs 24 crore:Rs 6,478 crore, respectively. The derivatives data available for the previous session show a five per cent rise in open interest as the bulls have pressed shorts on the index futures. |
| The indices have entered firmly into bearish channels again after a six-week hiatus and that too on fair volumes. |
| Indices are also trading below their short-term simple moving averages and the momentum oscillators are pointing towards a fall in the indices as the bulls are likely to offload positions on all advances. |
| The resistance on the upsides will be at the 1,732 and the 5,374 levels on the Nifty and Sensex, respectively. The support on the downsides will be at the 1655 and 5278 in the immediate future. Traders need to keep their ears to the ground and keep watching the volumes /market breadth and open interest figures for trend determination. |
| The outlook for the markets on Wednesday is that abundant caution as the undertone is panic driven and the bulls are losing their initiatives. |
| The weakness in the frontline stocks is likely to keep the benchmark indices suppressed in the near-term. The bear call spreads advocated in the recent past are in the money and profits maybe booked at these levels, at least partially. Vijay L Bhambwani |
| Sebi disclosure: the analyst has no exposure to the scrips mentioned above. |
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