Downsides appear to be limited
TECHNICALS
| The benchmark indices closed about a percentage point lower on selling pressure at higher levels. |
| The traded volumes were lower than the previous session but higher than the 10-day average. The market breadth was negative with the advances to declines ratio on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) combined standing at 994 : 1723. |
| The capitalisation of the breadth was also negative as the figures on the two bourses taken together were Rs 3,129 crore : Rs 6,821 crore. |
| The F&O figures available for Wednesday's session show a marginal increase in the outstanding long positions and a steady put call ratio at 0.19:1 since a few days. This steady trend suggests lack of excessive panic at lower levels. |
| The indices have shown a bounceback from lower levels as the Nifty has a strong support at the 1810 - 1820 levels and the BSE Sensex at the 5740 levels. |
| On the upper side, expect resistance at the 1912 and 1930 levels on the Nifty and at 5850 to 5900 on the Sensex. |
| The technology sector is likely to see some more weakness and consolidate at lower levels before any upmove is likely. |
| The boost is likely from the banking, automobile and steel sectors. Keep an eye for traded volumes in case of an upmove, as lower volumes on rallying days signals a lack of buying momentum on the upsides. |
| The outlook for Friday is of abundant caution as the markets are likely to consolidate at lower levels. |
| This is because nervousness on account of the dissolution of the Lok Sabha is likely to be factored into the prices sooner rather than later. |
| The downsides now appear to be limited and should the overseas markets be firm, expect the downsides be limited. |
| Among stocks, Maruti is likely to see an accelerated upmove above Rs 440 levels and may test Rs 450 levels in the near term. Buying is recommended in the cash and derivatives segment especially in a firm market. |
| Traded volumes must be curtailed in view of higher volatility. |
| Vijay L Bhambwani is CEO, BSPLindia.com. The author is a Mumbai-based investment consultant and invites feedback at vijay@BSPLindia.com or (022) 23400345 / 23438482. |
| Sebi disclosure: The analyst has no exposure to the scrips mentioned above. |