The markets witnessed an evening attack as per the oriental charts and that was fortified by a crude dragonfly doji or “tonbo doji”. The bulls emerged in the late hours of the trading session to attack the bears — so the term evening attack.
The market breadth was negative as the BSE & NSE combined breadth was 1,235 : 2,631. The capitalisation of the breadth was also negative on a commensurate basis as the figures were Rs 8,108 CRs : Rs 9,197 Crs.
The markets have closed at the upper end of the intraday range on higher volumes, fortifying a short-term optimistic view. The 4,180-3,900 range advocated for Tuesday held as the Nifty spot respected the specified support.
The coming session is likely to witness a range of 4,195 on advances and 3,975 on declines. The bulls will need to keep the Nifty above the 4,025 level consistently if the trend is to recover in the near term. On the flip side, a consistent trade below the 3,990 will see the bears gaining strength.
The market internals indicate a higher turnover as the participation levels rose due to the short squeeze. The number of trades increased and the average ticket size was higher, indicating an improved buying bias. The capitalisation of the market was lower in line with a downtick session. Avoid aggressive fresh short-selling at these levels for now.
Vijay 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.
