Hints of consolidation
TECHNICALS
| The traded volumes were lower than in Monday's session with participants adopting a wait and watch approach. |
| The breadth was positive as the ratio of advancing to declining shares on the Bombay Stock Exchange and the National Stock Exchange combined were 1836 : 1322. |
| The F&O data of the previous session indicate a bullish undercurrent as the bulls have enhanced their commitments in the futures segment. |
| The indices are showing signs of consolidation as the critical short-term support levels of 2034 and 6505 on the Nifty and the Sensex, respectively, have not yet been violated. |
| The short-term players need to watch the minor resistance levels at 2064 and 6574 levels on the Nifty and the Sensex, respectively. |
| A convincing close above these levels with higher volumes will see a fresh gain in the short term. |
| Traded volumes will play a crucial part in trend determination as the retail segment is going to be a key to the sustainability of the market trends. |
| The outlook for the markets on Wednesday is that of cautious optimism as the correction / consolidation process is unlikely to last beyond three consecutive sessions and therefore the markets are likely to take a directional call in the coming session. |
| Among stocks, activity is likely to be seen in HDFC, which is showing signs of strength as the scrip derives support at the short-term averages on the weekly charts. |
| Buying is recommended as long as the scrip remains above the Rs 805 levels in the cash and derivatives segments. |
| Trades should be initiated on lower volumes till clarity emerges in the markets. Vijay L. Bhambwani |
| Sebi disclosure: the analyst has no exposure to the scrips mentioned above. |