Continued optimism

TECHNICALS

The markets opened with a spring in its step and ended with strong gains as the global cues cheered local players. The traded volumes were however significantly lower, indicating a lack of secular participation and conviction in the upmove.

The weekend factor is partly responsible for this factor. The market breadth was positive as the combined exchange figures were 2469 : 1444. The capitalisation of the breadth was also positive as the commensurate figures were Rs 17852 crore and Rs 556 crore.

The F&O figures pointed towards implied volatility hitting 129 per cent annualised.

The indices have closed near their intraday highs and the final hour of trade saw relatively higher volumes as participants initiated some fresh positions. The price action imbibed confidence, though the volumes leave a lot to be desired for.

The 5250 resistance specified for Friday was easily overcome even on a closing basis as the bulls managed to hold their own against the bears. The coming session is likely to witness an intraday range of 5575 on advances and 5160 on declines.

The wide range is due to the higher base effect of Friday's range. Watch the volumes keenly in case of an upmove. The outlook for the markets on Monday will be that of continued optimism subject to the overseas cues being neutral / positive.

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.