Positive internals signal firmness

TECHNICALS

Yesterday I had mentioned that support existed on the oriental charts in a "Kumho" formation. That support held as the geo political tension failed to make a significant dent in the underlying bullishness. The traded volumes were truncated due to limited retail and institutional activity.

The market breadth was positive as the combined figures were 3165:941. The capitalisation of breadth was also positive as the commensurate figures were Rs 21264 crore: Rs 4428 crore.

The markets traded in a tight range and the intraday band of 6045/6115 was violated on the downside, as the Nifty's intraday low was 6021. The positive market internals and steady closing indicate a firm sentiment as the players prepare to bid 2007 adieu on Monday.

The western daily chart shows a lower tops and bottom formation and the candle chart reveals a "Tonbo/Takuri" formation, which can have bearish implications in the absolute near term unless the bulls smash the 6115 levels with force.

The intraday range on Monday is likely to be 6125 on advances and 5980 on declines and the bullish pivot will be 6070.

The outlook for the markets on Monday is that of cautious optimism. Should the overseas cues be weak, expect some unwinding in the absolute near term. Trade on smaller volumes for now.

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.