The markets reversed the brief upmove as was anticipated yesterday. The underlying factor of overhead supply proved to be a formidable hurdle that the bulls were unable to overcome.
The traded volumes contracted and the market breadth was negative as the combined exchange figures were 1,060 : 2,667. The capitalisation of the breadth was also negative as the commensurate figures were Rs 693 crs : Rs 10,914 crs.
The indices have closed in the lower half of the intraday range and on poor market internals. The lower traded volumes can at best be a minor mercy as markets are known to slide extensively on poor volumes, aided by gravitational forces.
The intraday range specified for Wednesday at the 3,325-3,030 has held as the Nifty gyrated within the specified parameters. The oriental chart indicates a “daki” pattern, which has short-term bearish implications. The coming session is likely to witness a range of 3,170 on advances and 2,935 on declines. As long as the Nifty remains below the 3,110 level, the session will belong to the bears.
The outlook for the markets on Thursday is that of abundant caution as the bulls are likely to be on the back foot. Avoid big-ticket trades in either direction as the impeding expiry will see heightened volatility.
