Buoyed by lower crude prices and positive overseas cues, markets ended the weekend session with strong gains. The benchmark indices gained over 3 per cent at close.
The traded volumes were lower as compared to the previous session, which is a negative indicator on an uptick session. The market breadth was positive as the BSE and NSE combined advance decline ratio was 4:1.
The capitalisation of the breadth was also positive as buyers outnumbered sellers.
The indices have closed at the upper end of the intraday range as the upward momentum continued till the end. That the market internals were positive adds to the weight of evidence pointing towards short covering at lower levels. The intraday range specified for Friday between 2,820 and 2,625 levels was overcome on the upside as the index rallied past the specified resistance.
The coming session is likely to witness a range of 2,900 on advances and 2,750 on declines. As long as the Nifty spot remains above the 2,800 levels, the outlook remains positive.
The outlook for markets on Monday is that of guarded optimism. Should overseas cues remain positive, expect markets to attempt some more upsides.
Vijay L Bhambwani
(Ceo - BSPLindia.com)
(The author is a Mumbai-based investment consultant)