The markets logged another bearish session as the overseas cues hit the domestic players hard. The market breadth was expectedly negative as the BSE figures point towards internals of 1:9.
The selling pressure persisted till the fag end of the session and the undertone was extremely nervous. That the 3,715 previous support was violated was the moot point for the bulls to start capitulating their positions. The F&O data indicate a marginal short-covering at lower levels.
The indices have closed at the lower end of the intraday range and that too on the first session of the week. That sets the tone and tenor of the markets in the downward direction. The intraday range specified between the 3,920-3,715 levels for Monday was violated as the “tsutsumi” pattern on the oriental charts advocated over the weekend took effect on the short-term price movement.
The coming session is likely to witness a range of 3,750 on advances and 3,450 on declines. The wide range is due to the high base effect of the Monday’s session. The bull-bear pivots for Tuesday will be at the 3,730, above which the markets may rally and 3,670 below, which the outlook is bearish. The dice is currently loaded in the favour of bears.
The outlook for the markets on Tuesday is that of absolute caution as the only immediate trigger for an upmove is a short squeeze. The markets are trading light where the open interest is concerned and that will sway the markets in either direction with a small nudge. Protect your capital as a priority.
Vijay L. Bhambwani
(CEO – BSPLindia.com)
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The author is a Mumbai-based investment consultant and invites feedback at vijay@BSPLindia.com
Mandatory disclosure: the analyst has no exposure to any scrip recommended above.
