Tech view: Buying conviction still lacking

The markets opened on a bullish note, only to flatter and deceive the bulls. The traded volumes were lower in the absence of overseas cues and the market breadth was positive.

The BSE & NSE combined advance decline ratio was 2,656 : 1,264. The capitalisation of breadth was also positive as the commensurate figures were Rs 8,837 crore : Rs 6,891 crore.

The indices have closed at the lower half of the intraday range and on lower volumes. Though the poor volumes indicate a lack of panic sales, the declines were accompanied by lower volumes due to trader apathy.

The 5,170 / 5,430 range specified for Monday on the back of a large base effect of Friday was not tested in either direction as the trading range was truncated. The 5,235 bullish pivot advocated for Monday was not violated for an extended period of time.

The coming session is likely to witness a range of 5,200 on declines and 5,355 on advances. Watch the traded volumes above the bullish pivot of 5,300 levels in case of an upthrust. High volumes will imply a tilt towards the bulls.

The outlook for the markets in the coming session will be that of cautious optimism as the bulls are unable to display a clear buying conviction. Unless the upthrusts are accompanied by high volumes, abstain from aggressive purchases.