Lower volume spells weakness

TECHNICALS

Led by the technology and banking stocks, the indices fell below the previous sessions lows. As was advocated yesterday, the ticket size per trade did not support the late upthrust of Monday. The turnover remained subdued and the market breadth was negative as the combined exchange figures were 894 : 2811. The capitalisation of the breadth was also negative as the commensurate figures were Rs 721 cr : Rs 10548 cr.

The indices have closed at the lower end of the intraday range but on marginally lower volumes. That indicates a lack of selling panic. The 2895 / 2705 range advocated for Tuesday was violated as the Nifty closed below the support levels. The coming session is likely to witness a range of 2775 on advances and 2600 on declines. The bullish pivot for the coming session will be at the 2750 above which the Nifty may rebound and the bearish trigger will be below the 2725 mark.

The market internals indicate a lower turnover as the participation levels fell due to the weakness. The number of trades decreased and the average ticket size was lower, indicating a poor buying bias. The capitalisation of the market was lower in line with a downtick session.

The outlook for the coming session is that of caution as the bulls are losing their grip on the markets. Buying may be contemplated only above the 2750 levels, that too if higher volumes are seen intraday.

Vinay L Bhambwani 
(CEO - BSPLindia.com) 

(He is a Mumbai-based investment consultant)