Bears prove their supremacy yet again

TECHNICALS

The market breadth was highly negative as the combined exchange figures were 796:3090. The capitalisation on a commensurate basis was negative too as the figures were Rs 2609 crore:Rs 14037 crore.

The weakness was prominent in banking. The markets have closed at the lower end of the intraday range as the bears proved their supremacy.

That the market internals were negative is a sign of absolute caution. The 4920 / 4825 range advocated for Monday was violated on the downside as the weakness gained momentum.

The Nifty crumbled after trading consistently below the 4855 bearish pivot as was advocated over the weekend. The coming session is likely to witness a range of 4620 on declines and 4860 on advances.

The wide range is due to the high base effect of the range on Monday. The 4790 level will be the bearish pivot for Tuesday, below which the bears will remain in charge of sentiment.

The market internals indicate a lower turnover as the participation levels fell. The number of trades decreased and the average ticket size was lower, indicating a weaker selling bias. The outlook for the markets on Tuesday is that of caution as the bulls are on the ropes. Avoid the temptation to bottom fish or average long trades.

Vijay L. Bhambwani
(CEO- BSPLindia.com)

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

Mandatory disclosure: the analyst has no exposure to any scrip/s recommended above.