The markets witnessed choppiness as the players digested the CRR cut implications (yesterday’s piece was written before the news). The market breadth was negative as the BSE & NSE combined breadth figures were negative at 1110 : 2732.
The capitalisation of the breadth was also negative on a commensurate basis as the figures were Rs 7853 Crs:Rs 9585 Crs. Technology stocks remained the achilles heel of the markets.
The indices have closed at the lower end of the intraday range and on negative market internals, but the ferocity of the decline appears to be easing. That makes for a possibility of a near-term swing bottom formation as Thursday is a local holiday and shorts may get squeezed on Wednesday.
The intraday range specified between the 3,750 and 3,450 levels for Tuesday held as the index traded within these parameters. The coming session is likely to witness a range of 3,730 on advances and 3,485 on declines. The bull-bear pivots for Wednesday will be at the 3,660, above which the markets may rally and 3,610, below which the outlook will be bearish.
The market internals indicate a higher turnover as the participation levels rose due to the bottom-fishing. The capitalisation of the market was lower in line with a nervous session.The outlook for the markets on Wednesday is that of cautious optimism as a short squeeze is not ruled out if the overseas cues are positive.