Sentiment subdued on weekend factor

TECHNICALS

The markets continued to remain under pressure, though a full-scale panic was missing. The traded volumes were lower as the trader participation contracted. The market breadth was negative as the BSE & NSE combined figures were 1,743 : 2,122. The capitalisation of the breadth was negative as the commensurate figures were Rs 6678 Crs : Rs 10,303 Crs.

The markets have closed at the lower end of the intraday band, with lower volumes and negative internals. These are indicators of caution in the undertone. The intraday range specified at the 4,630/4450 for Wednesday held as the Nifty traded within these parameters.

The coming session is likely to witness a range of 4,620 on advances and 4,450 on declines. The 4,620 continues to be a critical resistance as this level has proved to be a Waterloo for the bulls on multiple occasions. The bullish pivot for the session will be the 4,540 level, above which the Nifty spot must close to indicate optimism. On the other hand, a consistent trade below 4,525 will be a negative indicator.

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 weaker selling bias. The capitalisation of the market was lower in line with a downtick session.

The outlook for the markets on Thursday is that of caution as the weekend factor will ensure curtailed exuberance. Avoid aggressive 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 recommended above.