Margin calls may affect the market

The markets opened on an bearish note and swung between the bull and bear camps before ending with net losses. The traded volumes were lower and the market breadth was negative.

The combined exchange figures were 1659:2417 and the capitalisation was negative as the commensurate figures were Rs 13298 crore:Rs 14228 crore. The 5690 support pivot acted as an intraday floor for the bulls as the bears were unable to push markets lower beyond this threshold.

The coming session is likely to witness a range of 5640 on declines and 5840 on advances. The 5780 level will act as a crucial level for day traders on Wednesday. Should the Nifty stay below this threshold, the bears may get more aggressive. Watch this threshold for signs of higher volumes on a draw down below this level.

There was a fall in number of trades and an increase in the average ticket sizes, indicating support and short-covering. The capitalisation was down on the back of price attrition in the markets. The retail risk appetite was relatively lower.

The outlook for the markets on Wednesday is that of continued caution as the overseas cues and margin calls will continue to dominate the near term trends. I maintain my view that big ticket trades must still be avoided.

Vijay Bhambwani