Undertone continues to be bullish

TECHNICALS

The markets opened weak, but proceeded to recoup the initial losses by closing time. The traded volumes were marginally lower as the retail segment preferred to sit on the fence and wait out the volatility.

The market breadth was marginally positive as the combined exchange figures were 2008:1946. The capitalisation of the same on a commensurate basis was also positive as the figures were Rs 21392 crore: Rs 12620 crore.

The indices have closed at the upper end of the intraday band and that too on mildly positive market internals. Coming in the wake of weak overseas cues, that speaks for a bullish undertone. The 6200 support specified over the weekend has held as the Nifty bounced back from the 6193 levels.

The daily bar chart shows an inside day formation as the intraday range of Monday was "within" Friday's range, indicating a coiling up of the momentum for a bigger move in either direction.

The coming session is likely to witness a range of 6340 on advances and 6215 on declines. The 6250 level will be the intraday support pivot below which declines maybe exacerbated.

The outlook for the markets on Tuesday is that of continued optimism subject to steady/positive overseas cues. Bulge bracket trades must be avoided for now.

Vijay L. Bhambwani
(CEO- BSPLindia.com)

The author is a Mumbai-based investment consultant and invites feedback at vijay@BSPLindia.com or ( 022 ) 23438482 / 23400345.

Mandatory disclosure: the analyst has no exposure to any scrip recommended above.