New favourites to keep fuelling upsides

TECHNICALS

The markets opened on a firm note and proceeded to touch record levels through the day. The benchmark indices ended the day with over 1.2 per cent gains at close.

The traded volumes were lower than the previous session as the buying conviction at higher levels was conspicuous by its absence.

The market breadth was marginally positive as the BSE and NSE combined figures were 1895 : 1469 and the capitalisation of the breadth was also positive as the figures on a BSE & NSE combined basis were Rs 8845 crs : Rs 2296 crs.

The F&O figures for the previous session point towards a continued buying momentum and a build up of shorts at higher levels.

The indices have closed at nearly the highest points of the intraday range, which points towards a buying momentum till the fag end of the session.

That the traded volumes were lower on the first day of the trading week remains a minor concern as upsides are being perceived with scepticism.

The intraday levels for Tuesday for the Nifty spot are 3161.48 where support is likely and 3219.32 levels where resistance is likely in case of advances.

Beyond these levels, an extension in the direction of the breakout/ breakdown is likely. Much will depend on the traded volumes and the market breadth during the session.

The outlook for the markets on Tuesday is that of continued optimism as the markets are undergoing a process of "progressive destruction" wherein newer sectors are coming to the forefront and erstwhile favourites succumb to profit sales.

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.