| The markets opened on shaky note and ended the day with minor losses. Traded volumes were marginally lower than the previous session and in line with the 10-day average. |
| The market breadth was negative as the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) combined figures were 985 : 1593. The capitalisation of the breadth was also negative as the combined exchange figures were Rs 2273 crore : Rs 3207 crore. |
| The derivatives data available for the previous session indicate a rise of Rs 100 crore in net long positions in the futures segment, which is a positive indicator. |
| The indices have closed below the immediate resistance levels of 1567 and the 4984 levels on the Nifty and Sensex, respectively. The upsides are witnessing selling pressure as bulls are showing a lack of buying conviction at higher levels. The immediate resistance on the upsides will be at 1585 and the 5008 on the Nifty and Sensex. |
| These are threshold levels that the indices have been unable to surpass for the past two months. These are also the highest levels after the May 17, 2004 meltdown in the markets. |
| Unless these levels are surpassed convincingly with high volumes and positive market breadth for 2-3 sessions consecutively, I don't expect the markets to signal a fresh sustainable upmove. |
| On the lower side, expect the immediate floor to be at the 1545 and the 4924 levels. Keep watching the traded volumes and open interest for directional guidance. |
| The outlook for the markets on Wednesday is that of caution as the immediate trigger for the markets will be the transaction tax issue. Much of the trading session will be rangebound as the announcement is likely to come in the last hour of trade. |
| Under the given circumstances, I advocate holding the existing positions as long as the scrip trades above the 5-day highs and abstain from fresh commitments till clarity returns. |
| Traded volumes must be curtailed owing to the uncertainty expected.
Vijay Bhambwani |
| SEBI disclosure: the analyst has no exposure to the scrips mentioned above. |
Transaction tax announcement holds key
TECHNICALS
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First Published: Jul 21 2004 | 12:00 AM IST
