Lack of buying weighs on indices

TECHNICALS

The market was under pressure as the weekend factor and overseas concerns kept the bulls at bay. The market breadth was positive as the combined exchange figures were 2842:1270. The |commensurate figures were Rs 17,039 crore:Rs 11,244 crore.

The indices closed at the median point of the day's range and that indicates short covering at lower levels. But there is lack of buying at higher levels.

The daily bar chart indicated a lower top and bottom formation for the second session in a row. The 5965/6150 range was not tested. The 6095 pivot point was not overcome, which is a sign of weakness in the absolute short term.

The coming session is likely to witness a range of 6088 and 6007. The bearish pivot for Monday will be 6042, below which the bears would remain in charge.

The fall in number of trades and a decline in the average ticket size, indicated a lack of institutional support. The retail risk appetite was relatively low as well.

The outlook for Monday is cautious optimism as the overseas cues will dominate the near term sentiment. Big ticket trades must be avoided. Medium to long term players may buy Cairn India & ITC as these are indicating strength/breakouts on the weekly charts.

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 exposure to the scrip/s recommended above.