The markets opened with on a firm note and proceeded to trade lower through the day. The benchmark Sensex ended the day with a 15-point drop.
The traded volumes were Rs 1,164 crore on the Bombay Stock Exchange. The market breadth was negative as the BSE figures were 702 : 887 and the capitalisation of the breadth was also negative as the figures on the BSE were Rs 453 crore : Rs 697 crore.
Profit booking in the latter half of the session saw valuations erode in Old Economy stocks as players booked profits in nervous anticipation.
The traded volumes were higher and that makes the trading session crucial as the markets have fallen on higher volumes and a negative market breadth. This signals a lack of confidence on higher levels.
If the markets see a sustained fall, there is a possibility of the current upmove coming under a cloud. The outlook for the markets on Wednesday is that of caution as index heavyweights are under selling pressure at higher levels.
The Nifty has to cross the 990 levels for the markets to sustain a short-term upmove, resistance will then come at the 1006 levels. On the lower side, support exists at the 964 and 955 levels. Stock specific activity is likely
NIIT:- Yesterday derivative players were advocated to initiate short sales at Rs 122 or above in the mid month futures. That position is now in the money as the counter is under selling pressure.
The 200 day SMA is a formidable resistance at Rs 134. The downside is likely to be up to Rs 114 and Rs 111 levels. Start booking profits on short sales in phases.
Infosys - This counter is reeling under selling pressure as institutional players are paring exposure to this counter. Technically, this counter is turning weak below Rs 2,600.
Derivative players are advised to buy put options in the mid-month series at Rs 2,500 strike price.
Trade fewer stocks and in limited volumes.
Vijay Bhambwani
(CEO - BSPLindia.com )
The author is a Mumbai based investment consultant and invites feedback at vijay@BSPLindia.com
Sebi disclosure: the analyst has no exposure to the scrips mentioned above.
