Bulls lacking appetite to stop bear sales

The indices turned tail in the latter half of the session as per expectations that I advocated yesterday.

The weekend nervousness was apparent as the traders were unwilling to rollover positions initiated at lower levels. That exposes the weakness in the underbelly of the prevailing sentiments in the market. Traded volumes were in line with the previous session as the traders refused to enhance commitments.

The market breadth was marginally positive as the BSE & NSE combined figures were at 1837 : 1729. The capitalisation of the market breadth was also positive as the combined exchange figures stood at Rs 7082 cr : Rs 5397 cr.

The F&O data for the previous session indicated a marginal increase in the PCR and fresh net long positions being created.

The indices have closed at the lower end of the intraday range and that too on steady volumes. The fall may be attributed to the weekend blues that professional day traders suffer from.

The 4208 resistance specified for Friday held as the Nifty retraced from the 4209 top, and the closing was lower than the opening levels, indicating a key reversal on the daily charts.

The bulls will retain charge of the sentiments only when the intraday high of 4209 is overcome with higher commitment from bullish traders. Watch the traded volumes / open interest / implied volatility along with the prices in the coming days.

The outlook for the markets on Monday is that guarded optimism as the bulls are still to show the fire power needed to overcome the combined forces of bear selling and gravity to take markets higher. Till the overhead supply exists, desist from bulge bracket purchases.