Expiry day likely to be uneventful

TECHNICALS

The markets opened on a positive note and ended with gains as the pre-expiry bear squeeze pushed indices higher. The benchmark indices gained approximately 1 per cent at close.

The traded volumes were poor as compared to the previous session, which is a weak indicator. The market breadth was positive as the Bombay Stock Exchange (BSE) & the National Stock Exchange (NSE) combined advance decline ratio was 1,864:1,720. The capitalisation of the breadth was positive as the BSE & NSE combined figures were Rs 6,087 cr:Rs 2,346 cr.

The indices have closed in the upper end of the intraday band as the bear covering kept the benchmarks from declining heavily inspite of profit sales. The poor traded volumes and marginally positive internals indicate a lack of buying conviction at higher levels.

The intraday range specified for Wednesday at the 2790/2625 has held as the Nifty retraced from the 2789 levels. The coming session will witness a range of 2800 on advances and 2700 on declines. The bullish trigger for the session will be at the 2770 and the bearish trigger will be at the 2750 levels. Watch the traded volumes for signs of sustain ability of the upmove if any.

The outlook for the markets on Thursday is that of a range bound trade as the expiry day is likely to be uneventful as the rollover figures are weak. Should the overseas cues be weak, the bears may return with strength in the absolute near term.

Vijay L Bhambwani
(Ceo - BSPLindia.com)
The author is a Mumbai-based investment consultant and invites feedback at vijay@BSPLindia.com