The stock markets opened on a firm note and proceeded to trade range-bound through the session. The Bombay Stock Exchange (BSE) sensex ended 2002 at 3377.28 (up 02.31 points) and the National Stock Exchange (NSE) Nifty 50 ended the day at 1093.50 (up 01.55 points).
The breadth was positive as the combined figures of gainers to losers on both exchanges was 1306:901. The traded volume on the the BSE was Rs 1,165 crore, while on the NSE it was Rs 2,460 crore.
The capitalisation of the gainers versus losers also bears out an optimistic scenario as the combined Bombay Stock Exchange & National Stock Exchange figures were Rs 1,975 crore: Rs 1,648 crore.
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The volumes, though higher than yesterday, were still relatively lower than the average traded numbers. Institutional activity was seen at lower levels which signifies buying support at lower levels from stronger hands.
The outlook for the trading session tomorrow is that of cautious optimism in the light of the war clouds in the gulf, which makes the market news and sentiment driven.
The Nifty continues to enjoy good short-term support at 1078-1080 levels and the sensex at 3350 in the absolute near term.
The trend deciding levels on the upsides will continue to be 1100 and 3390 on the Nifty and the sensex, respectively. Technology stocks are likely to remain in the limelight, especially Infosys and Wipro, as they are relative out-performers.
Building long positions in small lots would be a good idea in these two counters. In the old economy segment, Tata Steel will continue to outperform as long as it stays above the Rs 146 mark. The stock should be held with a stop-loss at Rs 144.
Derivatives players may buy call options in Tata Steel at a strike price of Rs 155 and Infosys at a strike price of Rs 4,800.
Vijay Bhambwani
CEO, BSPLindia.com
Sebi disclosure: The author has no exposure in any securities mentioned above. The author is a Mumbai-based investment consultant and invites feedback at vijay@bsplindia.com