The market breadth was positive as the combined exchange figures were 2075:1846. The draggers were banking stocks which were pummeled by rising energy costs and inflationary concerns.
The markets closed at the lower end of the intraday range. That the market internals were positive is at best a mild silver lining in the otherwise dark clouds. The 5070 / 5200 levels advocated as a range for Tuesday held as the benchmark index tested the 5072 level and bounced higher. The 5140 bullish pivot did not hold and the selling pressure was significant.
The coming session is likely to witness a range of 5050 / 5160 as the bulls may attempt to defend the 5050 threshold. Should this level not hold, expect a decline to the 5015 levels. If the Nifty spot trades below 5100 during most of the session, expect a weak undertone.
The outlook for the markets on Wednesday is that of weakness as the bulls are unable to manage a close above the 5175 Fibonacci inflection point. Unless this is managed, expect the upsides to encounter overhead supply. Refrain from bottom fishing and focus on capital preservation.
Vijay L. Bhambwani
(CEO- BSPLindia.com)
Mandatory disclosure: the analyst has no exposure to any scrip/s recommended above.
