Bulls may recover

After opening on a weak note, the markets ended with strong gains. The bulls returned in the second half of the session, aided by pre-expiry bear covering. The benchmark indices closed with under 1.5 per cent gains at close. The traded volumes were higher compared to the previous session, which is a positive indicator.

The market breadth was even as the combined advance decline ratio was 1:1. The capitalisation of breadth was positive as the combined exchange figures were Rs 12,951 crore:Rs 5,509 crore.

The indices have closed at the upper end of the intraday range even as the market internals indicate an even strength between the bulls and the bears. The higher turnover indicates higher participation by the traders in the day's volatility. Coming on an uptick session, it is a positive sign. The 4800 / 4915 range advocated for Wednesday was tested on the upside as the Nifty overcame the upper threshold.

The coming session is likely to witness a range of 4975 on advances and 4860 on declines. The 4890 level will be a bullish pivot, above which the markets may remain firm.

The outlook for the markets on Thursday is that of cautious optimism as the bulls may attempt to recover lost ground. The overseas cues remaining neutral / positive may help their cause

Vijay Bhambwani
BS