After opening on the back foot, the markets closed with minor losses as short covering at lower levels saved the day. The traded volumes were lower as the retail participation was poor. The market breadth was negative as the combined exchange figures were 1,184 : 2,110. The capitalisation of the same was also negative as the commensurate figures were Rs 3,648 crs : Rs 6,548 crs.
The indices have closed at the upper end of the intraday spectrum. Coming on the back of lower volumes and negative internals, the pointers are towards bear covering rather than fresh aggressive buying. The intraday range specified for the 2780 / 2570 has held as the Nifty bounced up exactly from the 2570 levels. That validates the wave count in place and the same is corroborated by the oriental charts which indicate an evening attack formation. The coming session is likely to witness a range of 2735 on advances and 2590 on declines. If the bulls are to remain in charge of the session on Wednesday, they will have to keep the Nifty spot above the 2635 levels consistently and on higher volumes.
The outlook for the markets on Wednesday is that of guarded optimism as the 2500 level is proven to be a short term floor that the bulls are prepared to defend for now.
Vijay L Bhambwani
(Ceo - BSPLindia.com)
The author is a Mumbai based investment consultant)