High turnover spells optimism

TECHNICALS

The market breadth was positive as the combined exchange figures were 3194:696. The capitalisation of breadth on a commensurate basis was also positive as the buying was broad-based. The f&o data indicated a higher turnover, which is a positive sign.

The indices have closed at the upper end of the intraday range as short-covering cum buying kept the prices buoyant. The market internals turned positive, which indicates a mood swing in the retail camp in the absolute near term.

The 4070 / 3900 range advocated for Wednesday was overcome on the upsides as the Nifty spot closed above this threshold.

The coming session is likely to witness a range of 4045 on declines and 4270 on advances. The bulls will have to keep the average traded price of the Nifty spot above the 4100 to keep the sentiments bullish.

The market internals indicate a higher turnover as the participation levels rose due to the strength. The number of trades decreased and the average ticket size was higher, indicating an improved buying bias. The capitalisation of the market was higher in line with an uptick session.

The outlook for the market on Thursday is that of guarded optimism as the players are likely to have an overhang of optimism. Avoid big ticket long trades 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.