Tech view: Caution ahead as bulls take break

The markets opened on a weak note after negative overseas cues nudged the markets lower at opening bell. The downward spiral gained momentum and benchmarks closed with sizeable losses.

The market breadth was negative as the combined exchange figures were 1,041 : 2,893. The capitalisation of breadth was also negative as the commensurate figures were Rs 3,167 crore : Rs 13,224 crore.

The indices have closed at lower end of the intraday range as selling pressure continued till the end of the session, barring bear covering by day traders.

The Nifty trading below the 5,200 levels is not welcome news for the bulls and the lower traded volumes can only be a minor mercy as the markets are known to decline on poor volumes on the force of gravity alone.

The intraday range suggested at the 5,215 / 5,350 was violated on the downside and the coming session is likely to witness a range of 5,060 on declines and 5,235 on advances.

As long as the Nifty spot remains below the 5,175 levels, expect the outlook to remain weak. Any declines from this juncture will indicate a build-up of selling pressure.

The outlook for the markets on Thursday remains that of caution, with the bulls continuing to display a lack of buying conviction even on declines. Avoid buying into declines.