Avoid bulge bracket exposure

TECHNICALS

The markets opened on a weak note and proceeded to drift lower on the last day of the December futures and options (F&O) cycle. The lack of buying was evident till the fag end of the session. The benchmark indices lost over 1.5 per cent at close. The traded volumes were lower especially on expiry day. The market breadth was negative as the Bombay Stock Exchange advance decline ratio was 911:1505.

The indices have closed in the lower half of the intraday range and that too on negative market internals and weak sentiments. These are indicators of overhead supply as smart money continued with the distribution at higher levels. The intraday range specified for Wednesday at the 3025/2900 levels held as the Nifty bounced exactly from the 2900 mark. The coming session is likely to witness a range of 2960 on advances and 2850 on declines. The bullish pivot for the session will be the 2935 above which the bulls will need to keep the Nifty spot. Alternately, the outlook will remain weak below the 2935 levels.

The outlook for the markets on Friday is that of caution as the festive season will see curtailed participation and limited bullish support due to the weekend factor. Avoid bulge bracket exposure. Wish you all a merry Christmas.

Vijay L Bhambwani
(Ceo - BSPLindia.com)
(The author is a Mumbai-based investment consultant)