Profit sales may take place at higher levels

TECHNICALS

The markets opened on a positive note and ended the session with mild gains as buying emerged at lower levels. The traded volumes were lower than the previous session as buying was truncated due to scepticism at higher levels.

The market breadth was positive as the combined exchange advance decline figures were 1965 : 1925. The capitalisation of breadth was positive too as the commensurate figures were Rs 22,037 cr:Rs 10,267 cr.

The F&O data for the previous session indicated a 2 per cent increase in net long positions and a rise in PCR on advances. The market wide implied volatility remains high at 67 per cent.

The indices have closed at the upper end of the day's trading, on mildly positive market internals. The session marked an inside day pattern as the intraday range was contained "within" the previous session's range.

Tuesday's intraday high of 5976 remained untested and will be a short term resistance on rallies. The intraday range of 5960 / 5745, specified for Wednesday, held as the Nifty scaled an intraday top of 5952.

The coming session is likely to witness a range of 5960 on advances and 5835 on declines. Traders may note that the intraday support pivot will be 5920 levels.

The bulls will have to maintain the Nifty spot above this threshold, so as to ensure that the upward momentum remains intact. The ascent is showing signs of slackening in the near term.

The outlook for the markets on Thursday is that of continued optimism, though some profit sales may be expected at higher levels. Should the overseas cues be negative, expect the local players to be reticent about initiating fresh longs in big ticket trades.

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 mentioned above.