Weekend factor may limit exuberance

TECHNICALS

The market breadth was negative as the BSE & NSE combined advance decline ratio was 1721:2220. The capitalisation of breadth was positive as the commensurate figures were Rs 12,254 crore:Rs 11,807 crore.

The indices have closed at the lower end of the intraday band as the bears re-emerged at higher levels after a big upthrust session. The market internals turned negative on a downtick session and a decline in volumes makes the fall a routine one for now.

As advocated yesterday, the index was at a critical resistance from a bearish channel formation. The intraday range for Thursday advocated at the 4570 / 4325 held as the Nifty remained within these parameters.

The coming session is likely to witness a range of 4530 on advances and 4335 on declines. The bullish pivot for the session will be the 4480 above which the spot Nifty must remain to be firm. On the flip side, the bearish pivot will be the 4445 level, below which the bears will gain strength.

The market internals indicate a lower turnover as the participation levels fell due to the decline. The number of trades decreased and the average ticket size was lower, indicating a weak selling bias. The capitalisation was lower.

The outlook for the markets on Friday is abundant caution as the weekend session may restrict the exuberance factor.

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.