More gains likely

The markets continued to log gains as the index closed above the psychological barrier of 4300 on the Nifty spot. Traded volumes were marginally lower as the new derivatives settlement saw traders create positions afresh.

The inside day formation advocated yesterday had the desired effect as was expected. Since such formations are followed by large moves, the upmove was logical after overseas cues were positive.

The market breadth was positive as the BSE & NSE combined figures were 2145 : 1535. The capitalisation of the breadth was also positive as the combined exchange figures were Rs 11,900 cr : Rs 3,148 cr. The F&O data for the expiry session saw a 20 per cent decline in the net long positions.

The indices have closed near the intraday high of the session and surpassed the 4300 levels with a positive market breadth and above average volumes. Both are indicators of optimism and the closing is the highest ever as daily charts indicate.

That shows a prevalence of the bulls over the bears and the outlook ahead being positive. The coming session is likely to witness intraday levels of 4349 on advances and 4293 on declines. Watch the 4293 level on Monday, should this level not be violated, the strength will gain momentum.

The outlook for the markets on Monday is that of optimism as the bulls are likely to attempt to extend their hold on the sentiments and keep the bears under check. Should the overseas cues be neutral / positive, the bullishness will gain further impetus.