Bulls weary of lending support

TECHNICALS

The markets opened on a positive note as overseas cues and bear-covering aided an intraday recovery. But the negative closing indicated that the bulls still hesitated to lend firm support at lower levels.

The traded volumes were lower than the previous session as the intraday players abstained from big ticket trades at higher levels.

The market breadth was positive as the combined exchange figures were 2850:1179. The capitalisation of breadth was also positive at Rs 15617 crore:Rs 13330 crore.

The indices have closed at the lower end of the intraday range even as the market internals were positive. The western bar charts indicate an "inside day pattern" as the trading took place in a compressed intraday range.

That indicates a bigger move in the offing. Should the 5860 levels be violated forcefully on the downsides, expect a decline till the 5830 levels.

Upsides are likely to encounter resistance at 5995, indicating a falling daily range. Traded volumes must rise substantially on upthrusts if the upmove is to sustain.

The outlook for the markets on Friday will remain that of caution as the weekend factor coupled with overseas cues is likely to keep exuberance under check. Avoid bulge bracket buying for now.

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 recommended above.