Bulls to prevail above 3940 level in Nifty

TECHNICALS

The market attempted a feeble upmove even as select index heavyweights remained underperformers. The upmove was powered by bank and technology stocks, which are at the forefront of volatility. The market breadth was positive as BSE & NSE combined figures were 2219:1592. The capitalisation of the figures on a commensurate basis was also positive as the numbers were Rs 8668 crore:Rs 6248 crore. The futures and options data indicated some short covering at lower levels.

The indices have closed at the upper end of the intra-day range and on positive market internals. That indicates mild optimism in undertones. The intra-day range advocated for Wednesday at 4075/3765 held as the Nifty gyrated within these parameters. The coming session is likely to witness a range of 4035 to 4075 on advances and 3860 on declines. As long as the Nifty remains above the 3940 levels, the bulls will prevail over the bears.

The market internals indicate a lower turnover as the participation levels fell due to the holiday ahead. The number of trades decreased and the average ticket size was lower, indicating a lower buying bias. The capitalisation of the market was higher in line with a bullish session.

The outlook for the markets for Friday is that of guarded optimism as the near term outlook is likely to be determined by the US triggers. Avoid aggression on the long side.

 

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 recommended above.