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May 20, 2010, 08.41 AM IST
The coming session is likely to witness a range of 5025 on advances. Support is likely at the 4825 levels. The wide range is due to the high base effect of Wednesdays range.
The markets opened on bearish note and ended the session with widespread losses as the bulls failed to hold the Nifty above the 5075 bullish pivot, along expected lines. The benchmark indices ended with approx 3 % losses over the previous session. The traded volumes were higher compared to the previous session, which is a negative indicator for a downtick session. The market breadth was negative as the BSE & NSE combined advance decline ratio was 818 : 3374. The capitalisation of the breadth was negative as the BSE & NSE combined figures were Rs 6913 Crs : Rs 12979 Crs. The Nifty shed Rs 149476 Crs in market capitalisation.
The indices have closed in the lower end of the intraday range as the bulls were unable to support the markets on declines. The intraday range advocated for the Nifty between the 5125 / 4950 was violated as the Nifty fell to the 4908 levels - thereby exceeding our intraday wave count employed on the downside.
The coming session is likely to witness a range of 5025 on advances. Support is likely at the 4825 levels. The wide range is due to the high base effect of Wednesdays range. The bullish pivot for the session is likely at the 5000 levels and the bearish pivot at the 4960 levels. Traders must watch these levels for signs of trend determination in the coming session
The market internals indicate a higher turnover due to the selling pressure. The number of trades were higher and the average ticket size per trade was higher, indicating selling. The capitalisation of the market was lower in line with a downtick session. The f&o cues show the bears squaring up mild shorts shorts on declines.
The outlook for the markets today is that of cautious optimism as the bulls must hold the Nifty above the 5000 levels sustain ably to manage an upmove - a difficult task, but lower levels may attract bigger short covering.
The author is a Mumbai based investment consultant and invites feedback at vijay@BSPLindia.com or (022) 23438482.
Disclosure: The analyst has no exposure to the scrips recommended above.
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