Weak closing could lead to nervousness

TECHNICALS

The market breadth was negative as the combined exchange advance decline ratio was 1552 : 2299. The capitalisation was also negative as the commensurate figures were Rs 2,738 crore : Rs 15,925 crore.

The indices ended at the lower end of the day's spectrum that too with high turnover and weak market internals. The oriental charts indicate a "tsutsumi daki" pattern, with bearish implications in the absolute short term.

That the downward sloping channel on the Nifty remained a rough and ready support is a minor comfort. The intraday range specified for Thursday at the 4975 / 4860 levels was violated on the downside, which indicates an overhead supply in the near term.

The coming session is likely to witness a range of 4930 on advances and 4740 on declines. Being a weekend session, the traded volumes may be truncated and the session may be relatively quieter.

The outlook for the markets on Friday is that of nervousness as long as the Nifty remains below the 4865 levels. The overseas cues will continue to provide an overhang on the domestic sentiment. Focus on capital preservation 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 the scrips recommended above.