Unwinding bias emerges on advances

TECHNICALS

The market breadth was negative as the combined exchange figures were 1646:2148. The capitalisation of the breadth on a commensurate basis was also negative as the figures were Rs 6547 crore:Rs 8222 crore.

The f&o data for the session indicated a lower turnover and the Nifty PCR was at 1.20, indicating that bears largely held on to their shorts.

The indices closed at the upper end of the intraday range as the short-covering in the second half of the session lifted values. The market internals being negative signal a bias towards unwinding on advances by retail players.

The 4100 / 3960 range advocated for Tuesday was violated on the declines as the sentiments were eroded by the political triggers. The coming session is likely to witness a range of 3900 on declines and 4070 on advances. The bulls will have to keep the average traded price of the Nifty spot above the 3980 to dominate the bears.

The market internals indicate a higher turnover as the participation levels rose due to the volatility. The number of trades increased and the average ticket size was marginally higher, indicating a mild buying bias. The capitalisation of the market was lower.

The outlook for the market on Wednesday is that of guarded optimism as the players are likely to remain edgy on account to political developments. Avoid big ticket trades 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.