Internals demonstrate weak undertone

TECHNICALS

The markets opened on a bearish note and proceeded to extend the weakness throughout the session as the bulls lacked the firepower to stem the bearish tide. The benchmark indices lost about 5 per cent at close.

The traded volumes were lower compared to the previous session, which is a routine indicator as the retail segment withdrew from the markets.

The market breadth was negative as the BSE advance decline ratio was 345:2332. The capitalisation of breadth was weak as expected on a down-tick session.

The indices have closed at the lower end of the intraday spectrum. That the market internals were negative lend weight of evidence towards a weak undertone. The lower volumes are a minor mercy as markets can slide on lower volumes in bear phases.

The 4770 support advocated for Thursday was violated as the indices closed at the lowest in 2008. The "hakaishi" pattern advocated yesterday took it's toll on the bulls as expected.

The coming session is likely to witness a range of 4800 on advances and 4440 on declines. Being a weekend session, expect buying support to be truncated, barring unforeseen triggers.

The outlook for the markets on Friday is that of caution as the overseas triggers will exert a huge pressure on sentiments. Avoid buying for now.

Vijay L. Bhambwani
(CEO- BSPLindia.com)

The author is a Mumbai-based investment consultant and invites feedback at vijay@BSPLindia.com

Mandatory disclosure: the analyst has no exposure to any scrips recommended above.