Weekend factor may subdue mood

TECHNICALS

The markets logged the second downtick session as the bulls were on the ropes as per expectations. The traded volumes contracted over the previous session and the market internals were negative, a sign of withdrawal by retail players. The combined exchange market breadth was negative at 1,178 : 2,548. The capitalisation of the breadth on a commensurate basis was also negative as the figures were Rs 3,262 Crs : Rs 11,189 Crs.

The market ended on the back foot, with lower volumes and weak internals. These are routine signs as per oriental charts after a “tsutsumi/daki” pattern advocated yesterday. The 3,165/2,800 range advocated for Thursday held as the Nifty traded within these parameters. The coming session is likely to witness a range of 2,985 on advances and 2,760 on declines. Note the falling daily range. The bullish pivot will be the 2,955, above which the Nifty spot must remain to turn positive. Watch the 2,920 level as a bearish pivot, below which the bears will retain their initiative.

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 weak buying bias. The capitalisation of the market was lower in line with a downtick session.

The outlook for the markets on Friday is that of caution as the weekend session is likely to keep bulls at bay. Should the overseas cues be weak, expect more weakness.

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.