Global cues may trigger upmove

TECHNICALS

The Nifty reacted to routine pre-expiry short-covering in earnest as the headline indices found support near the previous session's lows.

The market breadth was positive as the BSE & NSE combined market breadth was 2,002 : 1,803. The capitalisation of the breadth on a commensurate basis was also positive as the figures were Rs 11,725 crore: Rs 4,329 crore. The technology sector was an under-performer despite the favourable dollar peg. The F&O data indicated a bias towards short-covering.

The indices have closed at the upper end of the intraday band on positive market internals, which indicate a cautious, but optimistic, undertone. The 4,190-4,050 range specified for Wednesday was overcome on the upside as the index closed and pierced this resistance intraday. The coming session is likely to witness a range of 4,220 and then 4,260 on advances and 4,100 on declines. The bullish pivot for the coming session will be at the 4,170 mark. The bearish pivot will be at the 4,140, below which the session is likely to be a weak one.

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 a firmer buying bias. The outlook for the markets on Thursday is that of cautious optimism and should the overseas cues be positive/neutral, expect an upmove.

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 recommended above.