The markets opened on a weak note and ended with losses as the overseas cues coupled with domestic selling dragged the markets lower. The selling was concentrated on the technology and banking stocks. The benchmark indices lost over 3 per cent at close. The traded volumes were lower as compared to the previous session, which is a negative indicator for the first day of the week. The market breadth was negative as the BSE advance decline ratio was 824:1613. The capitalisation of the breadth was also negative as the sellers outnumbered the buyers till the fag end of the session.
The indices have closed at the lower end of the intraday range on negative market internals and weak volumes. These are indicators of a lack of buying support at lower levels. The 2850 bullish pivot advocated for Monday did not hold and the 2800 floor projected was violated as the Nifty closed below this threshold. The coming session is likely to witness a range of 2850 on advances and 2675 on declines. Traders may note the falling daily ranges. The bearish pivot for the session will be the 2800 level below which the markets will remain under pressure.
As was advocated over the weekend, this is a double bottom threshold and will be a trend determining level in the coming sessions.
The outlook for the markets on Tuesday is that of caution as the bulls seem to be on the ropes and the outlook is weak in the near term. Unless the Nifty manages to trade consistently above the 2800 - 2825 congestion levels, avoid fresh longs.
