Major selling bouts unlikely

TECHNICALS

In a bull market, even intra-day corrections are deemed as sufficient consolidation as the undertone remains firm. This pattern was amply evident on Monday as the previous sessions (Friday's) intra-day consolidation was overcome in the initial part of the session itself.

The benchmark indices managed to close near their intra-day highs amid steady volumes.

The market breadth was highly positive as the Bombay Stock Exchange and National Stock Exchange combined advance decline ratio stood at 2068 : 1386.

The capitalisation of the breadth was also positive as the combined exchange figures stood at Rs 6578 crore : Rs 2139 crore.

The indices are nearing short-term bullish channel's upper trend-line which are likely to provide short-term resistance on an intra-day basis. These levels are at 2494 and 8154 on the Nifty and Sensex, respectively.

The support at lower levels on an intra-day basis is likely to be seen at 2467 and 8081 levels. Traded volumes need to perk up if retail participation is to pick up momentum.

The outlook for the markets on Tuesday is that of continued optimism as bulls are likely to retain their initiative.

Barring routine profit sales from short term players, major selling is unlikely.

Stock-specific activity is likely to be seen in Ballarpur Industries, which has signalled a breakout above 125 levels and closed above it. Buying is recommended for the short-to-medium term with a stop-loss at 118 /119 levels.

Traded volumes must be curbed in view of the higher volatility expected on the counter.

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.

SEBI disclosure :- The analyst has no exposure to the scrips mentioned above.