Overseas cues would determine the direction

TECHNICALS

The markets extended the previous session's profit taking bias on the back of weak overseas cues. The weekend factor took it's toll on sentiment as bulls refrained from initiating aggressive fresh longs. The traded volumes were lower than the previous session and this was on expected lines.

The market breadth was positive as the combined exchange figures were 2669:1310. The capitalisation of breadth was also positive on the indices as the commensurate figures were Rs 19,155 crore:Rs 8,580 crore.

The F&O data for the previous session indicated an almost 2 per cent increase in net long positions as the derivatives players bought stock futures and squared off Nifty futures.

The indices have closed at the upper end of intraday range and off intraday lows. The positive market breadth was a saving grace even as the volumes were marginally lower.

The intraday range of 5965/5855, specified for Friday, was violated on the downside as the opening factored in the overseas weakness.

The coming session will witness a range of 5820 on declines and 5990 on advances.

Watch the traded volumes on declines as higher volumes could lead to distribution at higher levels.

The outlook for the markets on Monday is that of cautious optimism. Should the overseas cues be negative, domestic markets may experience a slide.

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.

Mandatory disclosure: the analyst has no exposure to any scrip/s recommended above.