Caution can win the day

TECHNICALS

Markets extended their upmove as the trader participation improved over the previous session. Traded volumes expanded and the market breadth was positive as the combined exchange figures were 2496 : 1315. The capitalisation of the breadth was also positive as the commensurate figures were Rs 13778 Crs : Rs 1046 Crs.

The indices have closed in the upper half of the intraday range and that too on improved market internals. The traded volumes were higher than the previous session, but less than desired. The intraday range specified for Tuesday at the 3,235-3,000 has more or less held as the Nifty retraced from the 3,254 levels. The coming session is likely to witness a range of 3,325 on advances and 3,030 on declines. As long as the Nifty remains below the 3,170 levels, the bears will command the session. Conversely, the bulls will be in command above the 3,205 levels.

The market internals indicate a higher turnover as the participation levels rose marginally due to the anticipated strength. The number of trades increased and the average ticket size was higher, indicating an improved buying bias. The capitalisation of the market was higher in line with an uptick session.

The outlook for the markets on Wednesday is that of abundant caution as the upsides may see some overhead supply after a strong upmove. Avoid big ticket trades 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 recommended above.