After opening on a steady note, the markets plummeted past the specified supports as the Satyam Computer imbroglio yanked the floor below the bulls. The traded volumes sky rocketed as delivery based unwinding was evident. The market breadth was expectedly negative as the BSE advance decline ratio was 414:2111. The capitalisation of the breadth was also negative as sellers out-numbered the buyers.
The indices have closed at the lower end of the intraday band and on negative internals and higher volumes. That the volumes spiked higher on a downtick session indicates a possible further decline in the offing. The intraday range specified for Wednesday was violated as the Nifty closed below the support threshold.
As I had advocated yesterday, the impeding holiday forced the bulls towards the exit door, exacerbating the downward pressure. The coming session is likely to witness a range of 2760 on declines and 3050 on advances. The risk reward ratio is currently skewed in favour of declines.
The outlook for the markets on Friday is that of caution as the weekend session, overseas cues and pent up FII unwinding may weigh on the sentiments. Avoid aggressive bottom fishing for now.
Vijay L Bhambwani (Ceo - BSPLindia.com) (The author is a Mumbai-based investment consultant)
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