| Traded volumes were lower as bulls refrained from lending support. The market breadth was negative as the advances to declines figures on the Bombay Stock Exchange and the National Stock Exchange combined were 681 : 1970. |
| The capitalisation of the breadth was also negative as the figures on the two bourses taken together stood at Rs 675 crore: Rs 6,346 crore. |
| Derivatives data available for the Friday's session show a fall in open interest as in the futures segment with the overall outstanding positions remain stagnant. |
| The indices have violated their short-term support at the 1825 and 5740 and closed below these levels. |
| The next logical support comes at the 1778 and 5590 on the Nifty and the Sensex, respectively. |
| These are important supports on an upward sloping trendline and should not be violated on a closing basis. |
| The upsides will see selling pressure at the 1835 and 5745 levels. If the indices close above these levels, expect a further relief rally in the immediate future. |
| Keep watching the price/volumes/market breadth combination. |
| The outlook for the markets on Tuesday is that of caution as the initial part of the session is likely to see a spillover of the previous sessions weakness. |
| Thereafter, a relief rally caused by bear covering is likely. However, all major advances are likely to see offloading by the nervous bulls. Technology will continue to drag the indices lower. |
| The Nifty straddles that I have been advocating are in the money and should be held till expiry for maximum gains. Any fresh trades should be initiated on very thin volumes as I have been advocating in the recent past. |
| Vijay L Bhambwani CEO, BSPLindia.com |
| The author is a Mumbai-based investment consultant and invites feedback at vijay@BSPLindia.com or (022) 23400345 / 23438482. |
| Sebi disclosure: The analyst has no exposure to the scrips mentioned above. |
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