Comment

Last week witnessed weakness towards the end as the festive season and profit sales eroded the bullish confidence that was seen in the last fortnight. The expiry of the September series also had a part to play as bears squared their outstanding positions.

The weekly combined exchange advance decline ratio was mildly positive at 8167 : 7969. The capitalisation of the same was at Rs 48372 crore : Rs 46817 crore. The NSE shed Rs 59,559 crore in market capitalisation on a week-on-week basis as the profit sales eroded value. Of the entire turnover initiated during the truncated week, 74 % was executed on upthrust days.

The foreign institutional investor investments during the week were positive by Rs 6528.10 crore, which had a positive impact on sentiments. The rupee ended the week at 47.98 (previous week 48.13).

The US markets witnessed volatility due to the conflicting economic data, which resulted in a flurry of profit sales at higher levels. The benchmark indices in the US and UK shed about 2% — the weekly closes were towards the lower end of the weekly range.

This week is likely to see cautious trade globally as bulls may take a while to return to the fray. That is likely to lend similar cues to the domestic markets as well. Technically, the 5140 / 4825 range advocated last week for the Nifty has held and that validates our wave count analysis.

This week, being a holiday riddled one, will see heightened volatility and choppiness as short term retail players are likely to sit on the fence. The weekly range is likely to be between the 5125 on advances and 4825 on declines.

The weekly bullish pivot will be at the 5000 levels, above which the bulls will have to maintain the Nifty spot. The bearish pivot is at 4950 levels, below which the bears may display strength.

Traders should exercise caution and focus on capital preservation as the markets are known to drift after the Diwali season. In the absence of broad based participation, the impact costs are likely to high, leading to inefficient price discovery. Big ticket trades should be avoided at all costs in such a scenario.