The markets logged the fourth consecutive downtick session as positive overseas cues were missing. I had advocated an uptick subject to leadership from the US markets, which was wanting.
The market breadth was negative as the combined breadth figures of BSE & NSE were 576:3282. The capitalisation of the breadth was also negative on a commensurate basis as the figures were Rs 2097 crore: Rs 15699 crore.
The indices have closed at the lower end of the intra-day range, though off the intraday depths and on negative market internals.
The Nifty spot has hit the bearish channel bottom before closing higher, as I had expected creation of a swing reversal bottom on Wednesday.
The intra-day range specified between 3730 and 3485 levels for Wednesday was violated as the index traded below the support specified. The coming session is likely to witness a range of 3685 on advances and 3345 on declines. The bull/bear pivots for Wednesday will be above 3500, which the markets may rally and 3430 below which the outlook will be bearish.
The capitalisation of the market was lower in line with a nervous session.
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The outlook for the markets on Friday is dependent on the overseas cues as the domestic markets are shut for a day. The probability of a bounce is fair. Avoid short sales unless the weight of evidence is compelling.
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 scrip recommended above.