| The bourses opened on a firm note and ended the day with net gains as follow up buying emerged on all declines.
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| The breadth was positive as the combined figures on both exchanges showed gainers were marginally more in numbers than losers.
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| Traded volumes were in line with the 10-day average which is a comforting sign.
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| The capitalisation of the breadth was more positive than the absolute breadth, which bares buying momentum in index heavyweights.
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| As I had advocated yesterday, the bulls are unlikely to relinquish the initiative gained after the recent correction and the upward momentum is set to continue. Expect the indices to inch higher especially if the overseas markets show firmness.
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| The movement of the markets from this juncture onwards will be crucial as the second quarter has ended and mutual funds would have completed their net asset value balancing.
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| The NSE Nifty will see minor resistance at 1422 levels and more significant selling at 1432 levels. It is important that 1432 range be surpassed with very high volumes and a highly positive breadth.
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| The next leg of the upmove can then begin in earnest. The commensurate levels on the BSE Sensex will be at 4472 levels, which will be the trend determiner. On the lower side, expect support at the 1397 and 1385 levels in the near term on the Nifty.
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| The outlook for the trading session on Wednesday is of optimism as follow-up buying is likely to be seen in select heavyweights.
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| Expect action in the banking, steel, engineering, oil & gas, automobile and software counters.
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| Among stocks, Reliance is likely to test Rs 452 levels in the near term as the buying momentum is likely to accelerate.
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| The stock has cleared the 442 resistance on a closing basis and is in a new trading zone.
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| Buy afresh at Rs 444 and hold existing positions with a stop-loss at Rs 437 levels. Buy in the cash and derivatives segments.
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| ICICI Bank has cleared Rs 204 levels and has entered a new traded zone.
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| The bullishness in the banking sector is likely to ensure a trickledown effect.
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| Buy above Rs 204 levels and maintain a stop-loss at Rs 198 levels. Your profit target should be Rs 208 / Rs 209 levels.
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| Vijay Bhambwani
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| CEO, BSPLindia.com
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| The author is a Mumbai-based investment consultant and invites feedback at vijay@bsplindia.com.
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| Sebi disclosure: The author has no exposure in any securities mentioned above. |
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