Laboured upsides, profit sales likely

TECHNICALS

The markets opened on a bullish note and proceeded to extend the gains of the previous two sessions through the day.

The benchmark indices gained over a per cent but still ended the week with losses. Traded volumes were marginally higher than the previous session.

Market breadth was positive as the BSE and NSE combined figures were 2131 : 1306 and the capitalisation of the breadth was also positive as the figures on a BSE & NSE combined basis were Rs 9178 cr : Rs 3686 cr.

The F&O data for the previous session showed a build up over 2 per cent in fresh net long positions as the bulls lent support in a rising market.

The indices have closed at the upper end of the intraday band and that too with higher traded volumes and positive market breadth. That makes the upmove qualitatively more convincing than the previous session. If the bullishness is to sustain in the coming week, the Nifty spot must not close below the 3866 levels in the coming five sessions.

Traded volumes and market breadth must be positive and the open interest must ideally be higher, though the impeding expiry of the December derivatives series may make this criteria somewhat difficult to fulfil.

As I had advocated a resistance at the 3899 on an intraday basis for Friday, the index rallied to the 3908 and retraced below this threshold at close. The coming session will see 3927 on the upsides and 3848 on declines.

The outlook for the markets on Monday is that of continued optimism, though upsides may be laboured. The bulls are likely to be divided above the 3900 levels and short term players may opt for profit sales.

Vijay L. Bhambwani (CEO- BSPLindia.com )

The author is a Mumbai-based investment consultant and invites feedback at vijay@BSPLindia.com or ( 022 ) 23438482 / 23400345.

Mandatory disclosure "� the analyst has no exposure to the scrips mentioned above.