The “gravestone doji” formation advocated yesterday played out its effect as the markets were hammered at higher levels. The bulls watched mutely as the bears regained the initiative.
The market breadth was expectedly negative as the BSE & NSE combined figures were 633:3225. The capitalisation of the same was also negative as the commensurate figures were Rs 442 crore:Rs 12820 crore. The traded volumes were subdued as the declines stumped the retail players.
The indices have closed in the lower end of the intra-day range as was expected. That the market internals were negative and the volumes were lower adds to the gloomy outlook. The intra-day range specified for Wednesday at 3620/3420 was breached on the downside as the Nifty closed below this threshold with a wide margin.
The coming session is likely to witness a range of 3450 on advances and 3200 on declines. The bearish pivot for the session will be at the 3400 level and as long as the Nifty spot remains below this level, expect declines.
The outlook for the markets is that of absolute caution as the bulls’ soft underbelly has been exposed. Should the overseas cues remain negative, the bulls are likely to be further compromised.
Vijay L. 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/s recommended above.
