Bulls pushed on the backfoot

TECHNICALS

The markets had a gap-down opening after Asian cues played the party-pooper. The traded volumes shrank marginally and the market breadth was negative as the combined exchange figures were 926:2947. The capitalisation of the same was also negative as the commensurate figures were Rs 890 crore:Rs 11274 crore.

The indices closed at the lower end of the intraday band and on negative market internals. Coming after an uptick session, these are indications of further declines as the upthrust was a technical correction.

The concerns on the volumes front specified yesterday was validated as the desired follow-up buying was missing. The 4480 / 4350 range advocated for Thursday was violated as the index closed below the support specified.

The coming session is likely to witness a range of 4375 on advances and 4180 on declines. Below the 4330 trigger level, the bears will have an edge, whereas the bulls will take charge only above the 4365 Fibonacci level, that too on robust volumes.

The market internals indicate a lower turnover as the participation levels fell due to the weakness. The number of trades increased and the average ticket size was lower, indicating a weak selling bias.

The outlook for the markets in the coming session is that of caution as the bulls are clearly on the backfoot and unwilling to lend support, thereby adding to the impact of overhead supply. Desist from bargain hunting 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.