The banking and technology stocks proved to be party poopers for the second day in a row. As advocated yesterday, the bulls were at a serious disadvantage and therefore unable to lend credible support. The benchmark indices fell over 3 per cent at close.
The traded volumes were higher compared to the previous session, which is a negative indicator for a downtick session. The market breadth was negative as the BSE & NSE combined advance decline ratio was 985:2608.
The capitalisation of the breadth was also negative as the BSE & NSE combined figures were Rs 1,019 crore: Rs 9,738 crore.
The indices have closed in the lower half of the intra-day range as the selling pressure persisted till the end of the session. The 2,790 bearish pivot level advocated yesterday was not even tested and the bears resorted to a “morning attack” formation on the oriental charts for the second day in a row.
The 2,875/2,700 range advocated was violated as the Nifty fell below the lower threshold by a narrow margin. The coming session is likely to witness a range of 2,775 on advances and 2,625 on declines.
The daily range is in a downward spiral. The bullish pivot will be 2,750, above which the bulls will attempt a recovery. On the flip side, below the 2,720 threshold, the bears may push the Nifty lower.
The market internals indicate a higher turnover as participation levels rose due to the intra-day selling.
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The number of trades increased and the average ticket size was higher, indicating a selling bias. The capitalisation of the market was lower in line with a downtick session.
The outlook for the markets on Thursday is that of caution as the bulls are under increasing pressure. Continue to trade light in the coming sessions.
Vijay L Bhambwani
(Ceo - BSPLindia.com)
The author is a Mumbai based investment consultant
