Wednesday, August 15, 2007

Markets to be top-heavy in the near term

The markets witnessed a lacklustre session on account of a subdued overseas influence and a holiday on Wednesday (Independence day ). Traded volumes remained below the 10-day average and the market breadth was positive as the combined exchange figures were 2151 : 1640.

The capitalisation of the breadth was also positive as the figures were Rs 6354 crore : Rs 5125 crore. The derivatives figure for the previous session indicates a 2.23 per cet increase in net long positions and a marginal increase in the overall PCR.

The indices have closed at the lower end of the intraday spectrum and traded volumes were lower - partially due to limited participation by the retail segment ahead of a holiday.

The market breadth indicates some underlying optimism, though a sustainable upthrust cannot be assumed on these figures. The 4410 / 4335 intraday range specified for Tuesday was not tested in either direction, indicating a narrow range bound move.

As advocated yesterday, buying conviction is lacking at higher levels. The coming session is likely to witness a range of 4395 on advances and 4345 on declines. The market internals will be an important area to watch in the coming few sessions.

The outlook for Thursday is that guarded optimism as much will depend on the overseas cues and the impending expiry. The markets maybe top-heavy in the near term and aggressive buying may be postponed for now.

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