After opening on a firm footing, the markets remained buoyant as the previous session’s strength percolated to the current session. As the head & shoulder target was met, the oversold markets sprang to life and logged strong volumes as compared to the previous 10 days’ averages.
The market breadth was positive as the BSE market breadth was 1888 : 740. The capitalisation of the breadth was also positive as the buying momentum persisted till the end of the session.
The indices closed at the upper end of the intraday band on positive market internals and robust volumes, which indicate a short-term bottom formation. Higher volatility lends weight to this hypothesis. Traders should welcome it as a relief rather than fear it in the absolute near-term.
The 4200 / 3920 range specified for Friday was overcome on the upsides as the Nifty closed convincingly above the resistance specified. The traded price stayed above the average, emboldening the bulls.
The coming session is likely to witness the range of 4385 on advances and 4100 on declines. The bullish pivot for the coming session will be at the 4180 mark. The wide range is due to the high base effect of the range on Friday. Follow-up buying is a pre-requisite for a sustained upmove here onwards. Watch the turnover figures keenly.
The outlook for the markets on Monday remains that of optimism, barring unforeseen circumstances.
Vijay L. Bhambwani
(CEO – BSPLindia.com)
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The author is a Mumbai-based investment consultant and invites feedback at vijay@BSPLindia.com
Mandatory disclosure: the analyst has no exposure to any scrip/s recommended above.