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| This anomaly is explained by the composition of the indices which are distinct from one another.
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| Traded volumes were significantly higher than the 10 day average traded volumes and the breadth was negative as the index heavyweights saw sustained selling.
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| As I had advocated yesterday, the selling has come at the 1307 levels, which are close to the March 2001 levels from where the markets melted.
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| Investors holding long positions since that period were expected to offload longs as break even levels were reached.
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| Till such time as the immediate 1315 hurdle is not surpassed with convincing volumes, that too with a highly positive market breadth, I foresee a consolidation / corrective phase in the markets till that supply is absorbed.
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| What is crucial is the 1220 support which should not be violated on the downside. Below the last mile support of 1200, short term traders should liquidate long positions and convert to cash.
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| The outlook for the markets on Wednesday is that of abundant caution as the markets have shown a selling tendency at higher levels and the market breadth has been very bearish.
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| Among stocks, the ACC counter has cleared the immediate resistance at Rs 212 levels and has closed convincingly higher.
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| Should the markets remain firm, I expect Rs 220 levels to be the next target for this counter.
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| Buy in the derivatives and cash segment.
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| Reliance has closed above Rs 365 levels for the first time after week ended 12/6/01 and has achieved that with higher volumes.
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| That lends credibility to the rise and a next target of Rs 375 should be a possibility in the immediate futures.
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| Buy / hold in the cash and derivatives segment. I expect this counter to lead the markets from the front.
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| Vijay Bhambwani
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| CEO - BSPLindia.com
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| The author is a Mumbai-based investment consultant and invites feedback at vijay@BSPLindia.com.
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| Sebi disclosure: The analyst has no exposure to the scrips mentioned above. |
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