Volume-led run a big positive

Technicals

 The rally was powered by the software counters, which ended a 3-day losing streak. Traded volumes were higher than the 10-day average on an uptick day, which is a heartening sign.

 It signals confidence on the part of buyers on the upsides. The market breadth has been widely positive and all the criteria of a bullish market are fulfilled in today's trading session.

 The Nifty has been unable to cross the 1253 minor resistance point, which is where the test of the current rally will be in the short term.

 Should the Nifty surpass this level convincingly, the next hurdle will be the 1280 levels. The broader participation means the probability of an upmove is fair to high.

 As long as the index heavyweights continue to rise with higher volumes and stay above their 13-day SMAs, the upmove has the steam to continue.

 Sectoral interest is likely on the oil & gas, banking, automobile and pharmaceutical segments.

 The outlook for the on Thursday is that of optimism (barring any unexpected developments in the US markets) as Friday being a holiday, follow up buying by stronger hands is likely.

 Among stocks, ONGC is exhibiting high relative strength compared with the indices in the short term and is likely to see Rs 585 - Rs 600 levels in the short term in a firm market.

 Reliance Industries counter has the potential to lead the rally from the front if a conclusive closing is achieved on the cash segment above Rs 365 levels.

 A rapid appreciation of 2-3 per cent is likely in the short term. Keep a watch on the price / volume action and buy in the cash and derivatives segments.

 Vijay Bhambwani

 CEO, BSPLindia.com

 The author is a Mumbai-based investment consultant and invites feedback at vijay@BSPLindia.com.

 Sebi disclosure: The analyst has no exposure to the scrips mentioned above.