The volume imperative
TECHNICALS
| Traded volumes were stagnant compared with the previous session and the 10-day average. |
| The market breadth was positive as the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) combined figures were 1565 : 1056 and the capitalisation of the breadth was also positive as the figures on a BSE-NSE combined basis were Rs 3901 crore: Rs 701 crore. |
| Derivatives data available for Monday's session show a marginal rise in open interest as outstanding futures positions have over risen ahead of the expiry. |
| The indices have closed higher but are still to surpass the critical threshold levels that I have advocated at 1607 and 5076 on the Nifty and the Sensex, respectively. |
| Unless these levels are overcome with high volumes, positive market breadth and increase in open interest, the upmove is likely to be difficult to achieve. |
| On the lower side, expect the indices to get support at the 1582 and the 5034 levels on an intra-day basis. Banking and oil stocks are likely to be under performers in the near term. |
| Traded volumes must pick up if the markets are to see a sustainable upmove. |
| The outlook for the markets on Wednesday is that consolidation as the impeding expiry of August series will be the trend determinator in the near term. |
| There is unlikely to be any major movement in either direction as the squaring up of positions is likely to cushion directional mobility. |
| I continued to advocate bearishness on select PSU stocks such as Bank of Baroda in the near term as advocated yesterday. |
| Trades should be initiated on low volumes as the markets are still unstable. Vijay L Bhambwani |
| SEBI disclosure: the analyst has no exposure to the scrips mentioned above. |