Market outlook optimistic

The markets opened higher on Monday, and proceeded to extend early gains as the bulls celebrated the weekend gains on the Dow Jones. The prospects of early elections having diminished, the sentiments were further boosted.

The combined exchange market breadth was positive as the BSE & NSE combined figures were 2834 : 1255. The capitalisation of the breadth was also positive as the commensurate figures were Rs 18,105 crs : Rs 1,799 crs.

The F&O data for the session indicated a 1.02 per cent increase in net long positions amid a rising PCR.

The indices have closed at the upper end of the intraday range as the bulls prevailed over the bears and maintained their initiative till the fag end of the session. As I had advocated over the weekend, the oriental charts indicated a “Kouten” scenario - positive for the bulls.

The intraday resistance specified for Monday was easily overcome as the markets factored in the overseas cues. The coming session is likely to witness an intraday range of 5850 on declines and 6120 on advances.

The wide range is due to the big intraday range of Monday, making a large base effect. Traded volumes are below the 10-day average as the festive season is impacting participation.

The outlook for the markets is that of optimism, barring routine profit sales at higher levels. Avoid shorts for now.