The “karakasa” formation advocated yesterday according to oriental charts played its part after the intraday high of Monday was overcome convincingly. The only deviation from the classic textbook development, which specifies a “morning attack”, the markets witnessed an “evening attack”.
That implies the bulls got active later in the day rather than grab the initiative early in the session — attributed to the hurricane news from the USA. The market breadth was positive as the combined exchange figures were 2,553 : 1,327. The capitalisation of the breadth on a commensurate basis was also positive as the figures were Rs 17,036 Crs : Rs 1,775 Crs.
These are positive signs and will need follow-up buying to sustain the upthrust. The 4,420-4,295 range specified for Tuesday was overcome on the upside as the Nifty closed above the resistance levels. The coming session is likely to witness a range of 4,395 on declines and 4,620 on advances.
The market internals indicate a higher turnover as the participation levels rose due to optimism. The outlook for the markets on Thursday will be optimistic, subject to the overseas cues as domestic markets celebrate a local holiday on Wednesday. Shorts may be held back for now, unless compelling triggers emerge to support such a move.