Technical Analyst, Vijay Bhambwani:

The weakness continued as per expectation, though there were indications of buying at lower levels in the banking and technology sectors. The traded volumes were lower as compared to the previous session, which is a routine indicator for a weak session as retail participation contracts. The market breadth was negative as the BSE & NSE combined advance decline ratio was 773 : 3050. The capitalisation of the breadth was negative as the BSE & NSE combined figures were Rs 3960 Crs : Rs 13586 Crs. The NSE lost Rs 59639 Crs in market capitalisation.

The indices have closed in the upper end of the intraday range, with negative market internals and lower volumes. These are indications of some bear covering at lower levels. The intraday range specified for Monday between the 4130 / 3870 has held as the Nifty traded within these parameters.

The coming session is likely to witness a range of 4030 on advances above which the 4055 maybe likely. Support is likely at 3920 on declines below which the 3890 level maybe likely. The bullish pivot for the session will be at the 3975 and the bearish pivot at the 3950 levels. Traders need to watch the activity beyond these thresholds respectively for intraday guidance.

The market internals indicate a lower turnover due to the lack of buying conviction. The number of trades were lower and the average ticket size per trade 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 today is that of cautious optimism as the bears are showing some tendency to book profits at lower levels. Expect some pullback upwards.

Disclosure: The analyst has no exposure to the scrips recommended above.