The markets opened on a positive note and proceeded to trade higher through the day. The benchmark indices gained over a per cent as the bulls trounced the bears on the last day of the week. |
Traded volumes were higher than the previous session, which indicates a qualitative edge in the upmove. |
The market breadth was marginally positive as the BSE and NSE combined figures were 1716 : 1675 and the capitalisation of the breadth was also positive as the figures on a BSE & NSE combined basis were Rs 10261 cr : Rs 2432 cr. |
The F&O data for the previous session indicate a build up of fresh long positions and the bears have been systematically cutting exposure on declines. |
The indices have closed at the upper end of the intraday band and the market breadth and traded volumes indicate strength in the undertone. As I had advocated yesterday, the outlook remains tilted towards the bulls. |
However, a large portion of the retail segment lacks clarity and conviction in the markets and displays a half-hearted approach to participating in the short term undercurrents in the markets. |
The answer to the immediate trend lies in the short term charts (60 minutes or less) wherein a "catapult" formation is indicated using a 1 & 1 reversal parameters on the box size. |
However, these signals are unlikely to be interpreted accurately by the rank and file traders and therefore a lot of choppiness is seen in the markets. The 3822 top advocated for Friday has been convincingly overcome. |
The outlook for the markets on Monday is that of continued optimism and the bears may experience a further squeeze in positions as stops get filled on their trades on electronic system modules. |
Keep watching the ratio between the number of shares traded vis-a-vis the absolute number of trades in the run up to the budget. |
This will indicate whether the market is dominated by institutional activity or otherwise. So far the vast majority of the sessions have been dominated by the big ticket players.
Vijay L. Bhambwani |
Mandatory disclosure: the analyst has no exposure to the scrips mentioned above. |