Declining daily range indicates weak bias

TECHNICALS

The capitalisation of breadth on a commensurate basis was negative as the figures were Rs 8,176 crore:Rs 12,226 crore. The turnover was higher as the selling bias accelerated on advances.

The indices have closed at the lower end of the intraday range as the sentiments turned on a dime at the end of the day's trade. The higher cash turnover indicated unwinding at higher levels. The intraday range advocated for Tuesday at the 4940 / 5080 held as the Nifty traded within these thresholds.

The coming session is likely to witness a range of 5030 on advances and 4880 on declines. Traders may note the falling daily range, indicating a weak bias. The 5000 level will be a bearish pivot for Wednesday. Players may expect weakness should the index stay below this threshold on higher volumes.

The market internals indicate a higher turnover as the participation levels rose. The number of trades decreased and the average ticket size was higher, indicating an accelerated selling bias. The capitalisation of the market was lower in line with a down-tick session.

The outlook for the markets on Wednesday is that of caution as the bulls are likely to be on the defensive. Avoid 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.