Traded volumes were lower by approximately 7 per cent compared with Tuesday and the breadth was marginally positive in absolute and capitalisation terms.
Though the pointers are optimistic, the lower traded volumes on uptick days and higher volumes on falling days are a sign of slight concern. The rally is getting broader as retail participation is returning to the markets after a long hiatus.
Old economy is likely to rule the roost and the technology sector is showing lower relative strength on the short-term charts.
Among sectors, oil & gas is still showing a high relative strength while the steel sector is showing a higher beta (volatility ) reading. The automobile, pharmaceuticals, cement and telecom sectors will lead the rally laterally.
The next leg of the upmove is likely to commence after the March 9, 2001, levels are surpassed with convincing volumes and a highly positive market breadth.
The outlook for Thursday is of cautious optimism as the markets are below their short-term resistance levels.
As I have mentioned earlier, the appreciation is likely to be higher in the Sensex compared with the Nifty due to the unique composition of the indices.
The resistance levels will be at the 1317 and 4127 on the Nifty and the Sensex, respectively. On the lower side, expect supports at the 3920 & 1230.
Among stocks, ACC has touched Rs 220 levels in Wednesday
