Crisis of confidence is deepening

TECHNICALS

The markets opened on a weak note in tandem with overseas indices and closed with losses as the bulls abstained from follow-up buying support. The traded volumes contracted and the market breadth was negative as the combined exchange figures were 1290:2529.

The capitalisation of the same was also negative as the commensurate figures were Rs 3163 crore:Rs 9621 crore. The f&o data for the session indicated a lower turnover too as the trader interest waned on declines.

The indices have closed at the lower end of the intraday band and that too on negative market internals. Traders who are deriving comfort from lower volumes may note that the markets are known to slide on lower volumes for extended periods of time. The 4495 / 4350 range advocated for Monday held as the index traded well within these parameters.

The coming session is likely to witness a range of 4490 on advances and 4335 on declines. The relatively narrow band is due to the lower base effect of Monday’s range. The bullish pivot will be the 4425, above which the bulls will have an edge and below the 4390 levels the bears will have an edge.

The outlook for the markets in the coming session is laced with nervousness as the bulls have abstained from supporting the markets for 4 days in a row and the crisis of confidence is getting deeper. Avoid aggressive bottom-fishing 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.