Bulls likely to remain on the backfoot

TECHNICALS

The markets opened with a gap down and remained weak throughout the session. The traded volumes were lower as the retail players sat on the fence, unable to handle the about-turn in the markets. The market breadth was negative as the combined advance decline ratio stood at 1154:1460. The derivatives data indicated a lower turnover even as the bears did not seem to be in any hurry to square their shorts.

The indices have closed at the lower end of the intraday band as the bulls surrendered their new-found initiative rather meekly. The overseas cues played the main bearish trigger. The market internals turning negative makes the fall a cause for concern.

As advocated yesterday, the weekend factor forced the bulls to postpone buy decisions. The intraday range for Friday advocated at the 4530 / 4335 was violated on the downside.

The coming session is likely to witness a range of 4400 on advances and 4200 on declines. The bullish pivot for the session will be 4385, above which the spot Nifty must trade consistently to be firm. On the flip side, the bearish pivot will be the 4355 level.

The outlook for the markets on Friday is abundant caution as the weekend session may restrict the exuberance factor.

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.