The domestic markets flared up on the eve of the July series, taking positive cues from the overseas markets and easing energy prices. The indices witnessed a near 3 per cent advance as the bulls returned to squeeze the short sellers.
The market breadth was positive as the BSE & NSE combined advance decline ratio was 2669:1191. The capitalisation of the same on a commensurate basis was Rs 15,955 crore:Rs 1253 crore.
The indices have closed at the upper end of the intraday range, that too on expanded volumes and positive market breadth. These are bullish indicators and point towards continued short-covering on declines, due to expiry considerations.
The 4295 / 4050 range advocated for Wednesday was overcome on the upsides as the close was above the upper threshold specified. The coming session is likely to witness a range of 4400 on advances and 4230 on declines. As long as the Nifty spot remains above the 4275 threshold, expect optimism.
The market internals indicate a higher turnover as the participation levels rose due to the bullishness. The number of trades increased and the average ticket size was higher, indicating an accelerated retail buying bias.
The outlook for the markets on Thursday is that of continued optimism. Should the international cues be neutral to positive, expect more upsides. Avoid the temptation to press shorts for now.
