Markets lacking in follow-up buying

TECHNICALS

The markets witnessed a trading pattern similar to the previous session as the bulls failed to lift up the markets due to want of follow-up buying strength. The lower traded volumes indicate a resistance to enhancing fresh exposure on the long side.

The market internals were marginally positive as the combined exchange market breadth was 2029:1881. The market capitalisation on a commensurate basis was marginally positive too as the figures were Rs 11832 crore:Rs 6353 crore. The derivatives data indicated a lower turnover as the trader participation dried up.

The indices have closed at the lower end of the intraday spectrum as the profit sales persisted for the second day in a row. The mildly positive internals indicate a pressure at higher levels. The intraday range specified for Thursday at the 4590 / 4430 held as the Nifty retraced from 4480 level itself.

These were the after-effects of the “grave stone doji” witnessed on the japanese candlestick charts. The coming session is likely to witness a range of 4580 on advances and 4440 on declines. The bearish pivot for the coming session will be 4525, below which the bears will remain in command in the absolute near term.

The outlook for the markets in the coming session is that of profit-taking at higher levels as the weekend factor plays out in the markets. Avoid aggressive fresh longs 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.