Bulls may extend new-found initiative

TECHNICALS

The six-session gains proved unsustainable for bulls at higher levels as the follow-up buying that is so desperately required for a convincing upmove was lacking.

The market breadth remained positive as the combined exchange figures were 2826 : 1024. The capitalisation of the breadth was also positive as the commensurate figures were Rs 11898 crore : Rs 2845 crore.

The benchmark indices gained a tad at close as the profit sales at higher levels proved to be formidable in the near term. The derivatives data for Friday's session indicate a build-up of fresh positions, indicating that the bull was alive and kicking.

The indices have closed at the median point of the day as the tug-of-war between the bulls and bears was just about marginally tilted in the bulls favour.

The closing was fairly close to the opening levels, thereby indicating a truncated sentiment by closing time. Japanese Candle buffs will realise a "hoshi" formation on the daily chart which will indicate weakness if the Nifty trades consistently below the 4438 levels with higher volumes.

The 4495 level advocated as a resistance for the Nifty from Monday was validated by the markets as the intraday high was 4490. The coming session is likely to witness a range of 4450 on declines and 4500 on advances. Watch the traded volumes especially if the markets choose to slide.

The outlook for the markets on Tuesday is that of guarded optimism as bulls may attempt to extend their new found initiative - subject to overseas cues.

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 the scrips mentioned above.