After opening on a bullish note, markets ended with strong gains as the pre-expiry short squeeze coincided with fresh buying on overseas cues. The benchmark indices gained 5 per cent at close.
The traded volumes were higher as compared to the previous session, which is a positive indicator. The market breadth was positive as the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) combined advance decline ratio was 2,529:1,201. The capitalisation of the breadth was also positive as the BSE & NSE combined figures were Rs 12,482 crore:Rs 995 crore. The rally was fuelled by banking and midcap stocks, which outperformed the broader markets.
The indices have closed in the upper end of the intraday spectrum. The positive internals and the higher turnover indicate a bullish weight of evidence, at least till the expiry-related bear squeeze is on. The intraday range specified between the 2,845 and 2,745 was overcome on the upsides as the bullish pivot specified over overcome even on a closing basis. That indicates a breakout in the near term. The bulls will retain their initiative as long as the Nifty trades consistently above the 2,875 levels. Below the 2,850 levels, the bears may attempt some aggression. The outlook for the markets on Tuesday is that of cautious optimism as the positive overseas cues and bear squeeze can provide wind in the sails for the bulls.
Vijay L Bhambwani
(Ceo - BSPLindia.com)
(The author is a Mumbai-based investment consultant)
