The bourses opened on an optimistic tone in spite of the weakness in the US markets and proceeded to trade higher through the session.
The Bombay Stock Exchange (BSE) sensex ended the day at 3384.20 (up 26.33 points) and the National Stock Exchange (NSE) Nifty 50 ended the day at 1097.35 (up 08.00 points).
The breadth was positive as the combined figures on both exchanges was 1320:935. The traded volume on the BSE was Rs 1,393 crore, while on the NSE it was Rs 2,778 crore.
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The capitalisation of the advances versus declines was also bullish as the combined figures on the two exchanges were Rs 3,030 crore : Rs 1,137 crore. The index heavyweights were seen trading higher on buying support.
The indices have taken support at levels slightly higher than the 30-day simple moving average after having breached the 13-day simple moving average.
As I had advocated yesterday, the Nifty has tested the 1100 levels on the upsides and the stock-specific activity advocated of State Bank of India, Ranbaxy Laboratories and Tata Engineering has started paying dividends. Hold these long positions for higher valuations.
The outlook for the trading session today one of optimism and much will depend on the Infosys Technologies results for guidance on the software sector.
Expect higher volatility on technology counters and bullishness in the old economy stocks. The overall medium term trend being bullish, avoid short selling. Derivatives players are advised to hold January call options entered into yesterday on Ranbaxy, Infosys and SBI and add call options in Tata Engineering.
Vijay Bhambwani
CEO, BSPLindia.com
Sebi disclosure: The author has no exposure in any securities mentioned above. The author is a Mumbai-based investment consultant and invites feedback at vijay@bsplindia.com