Weekend factor may arrest exuberance

TECHNICALS

The markets opened on a cautious note and ended with minor losses as the short term players booked profits at higher levels. The development was along expected lines after a major upthrust on Wednesday.

The market breadth was positive as the combined exchange figures were 2541:1412. The capitalisation of breadth was also positive on a commensurate basis as the figures were Rs 17,734 crore: Rs 12,403 crore.

The F&O data for the previous session indicated a rise in net long positions as bulls initiated fresh purchases in stock futures.

The indices have closed at the lower end of the intraday range and that too on higher traded volumes. The market internals were positive as the overall optimism remained intact.

The 5780/6090 range specified for Thursday was not tested in either direction as the day's range was compressed as was expected.

The coming session is likely to witness a range of 5965 on advances and 5855 on declines.

Watch the traded volumes in case of an upmove as the uptick must be accompanied with high volumes if the rally is to sustain at higher levels.

The outlook for the markets on Friday remains that of continued optimism, though the weekend factor and overseas cues may limit the exuberance levels.

Avoid shorts unless compelling evidence suggests such a trade.

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/s recommended above.