The bears re-emerged from the shadows as the markets snapped their two-day advance. The decline more than compensated for the gains made in the recent sessions as the psychological blow to the bulls was bigger than the mathematical one. The fact is borne out by the steep decline in the last hour of trade and the concentration of trades in this time frame.
The combined exchange advance : decline ratio was expectedly negative as the figures were 1009 : 2742. The capitalisation of the breadth was also negative as the commensurate figures were Rs 359 crore : Rs 12,092 crore.
The indices have closed at the lower end of the intraday range and on marginally lower cash volumes. While this maybe a minor mercy as the markets are known to slide on poor volumes for prolonged periods of time, therefore bulls may expect limited relief.
The persistent selling till the final hour of trade and the yawning gap between the average traded price of the Nifty futures versus the actual traded prices indicated a fresh bear attack. The oriental chart shows a bearish engulfing formation, which has negative implications in the absolute near term.
The coming session is likely to witness a range of 3080 on advances and 2775 on declines. As long as the Nifty spot remains below the 3000 level, expect the outlook to remain weak.
The outlook for the coming session is that of caution as Thursday is a holiday and players may not be prepared to enhance bullish commitments in times of uncertainty. If the overseas cues are negative, it will add to the bearish outlook. Avoid the temptation to bottom fish for now.
Vijay L Bhambwani
(Ceo - BSPLindia.com )
(He is a Mumbai-based investment consultant)
