Unwinding by retail players in evidence

TECHNICALS

The stock markets opened on the backfoot and continued to remain under pressure as bulls were clearly under siege and lacked the conviction to fight off negative global cues.

Market breadth was absolutely negative as the BSE ratio was 295 : 2384. Traded volumes were marginally up "� a sign of weakness in a downtick session.

The capitalisation of the breadth was also negative as selling pressure was unabated. The F&O data for the day suggests that bears were unwilling to cover shorts aggressively.

The indices have closed at the lower end of the intraday range amid highly negative market internals. That the traded volumes remained firm indicates unwinding by the retail and marginal players in conjunction with the bearish forces at play.

The 4800 level advocated as a mild support has been violated and the markets have begun the advanced stage of fresh declines.

The intraday range on Monday is likely to be at the 4620 on declines and 4870 on advances. The range is wider due to the higher base effect of Friday.

The outlook for the markets on Monday is that of continued caution as bulls are likely to remain on the defensive. Bottom fishing is completely ruled out for now.

Vijay L. Bhambwani
(CEO- BSPLindia.com)

The author is a Mumbai-based investment consultant and invites feedback at vijay@BSPLindia.com

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