Weekly Technical Analysis

The markets opened on a bearish note as was expected owing to the weekend factor and an overhang of rising crude prices.

Traded volumes remained higher than the recent average and the market breadth was negative as the combined exchange figures were 709 : 3171.

The capitalisation of the breadth was also negative as Rs 5,715 crore : Rs 25,333 crore. The derivatives data for the previous session indicated a 2 per cent decline in net long positions as long positions were shifted to the lower risk options segment.

The indices have closed at the lower end of the intraday range as the bulls were unable to pull the benchmarks above the intraday pivot inflection point of 5,450 which I had advocated yesterday.

The 5065 support was not tested, which is a sign of minor optimism as a violation of this level would have seen fresh selling.

The coming session is likely to witness an intraday range of 5040 on declines and the 5393 level on advances. The pivot for the bulls to defend will be the 5280 level on the Nifty spot as the index will have to keep it's head above this level to give a fighting chance to the bulls.

The outlook for Monday remains that of caution as the overseas cues coupled with high oil prices will impact sentiments. I maintain my earlier advice that small traders must protect their capital in the near term.