Bears to book profit on short sales

TECHNICALS

The capitalisation of the breadth was also negative as the commensurate figures were Rs 1761 cr : Rs 13,828 cr. The F&O figures showed high turnover indicating bears pressing fresh shorts.

The indices have closed at the lower end of the intraday spectrum and that too with weak market internals. These are pointers towards a weak undertone. The intraday range specified for Monday at the 4470 / 4225 held as the Nifty took support exactly at the 4225 levels, thereby validating our wavecount.

The coming session will see a range of 4340 on advances and 4185 on declines. The 4275 threshold will be a bearish pivot for the day below which the bears are likely to stay in charge of the sentiments.

The market internals indicate a lower turnover as the participation levels fell due to the steep decline. The number of trades decreased and the average ticket size was lower, indicating a limited selling bias.

The outlook for the markets on Tuesday is that of continued caution as the only concerted buying effort is likely to be seen from the bears who book profits on short sales. Bargain hunting should be avoided for now.

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.