The markets continued to extend the previous session’s gains as was advocated by me yesterday. The upsides did encounter profit taking as the impending expiry of the June series witnessed some unwinding. Traded volumes were higher than the previous session, which is a positive indicator.

The market breadth was marginally positive as the BSE & NSE combined advance decline ratio stood at 2018 : 1590. The capitalisation of the breadth was also positive as the combined exchange figures stood at Rs 10681 cr : Rs 4945 cr.

The F&O data for the previous session indicated a 1.85 per cent increase in the net long positions amid a marginal increase in the Nifty PCR.

The indices have closed at the upper end of the intraday range but the rate of ascent has tapered off as the upsides are witnessing some profit taking by the short term / weaker bulls who are providing overhead supply. The 4276 / 4222 range specified for the Nifty yesterday held as the Nifty retraced from the 4275 level and tested the 4220 mark.

That validates our retracement / extension computations as the intraday range expands upwards. The coming session will witness an intraday range of 4301 on advances and the 4233 mark on declines. Watch the combination of market breadth, volumes and open interest as a higher risk appetite on the weekend session will indicate a bullish week from Monday onwards.

The outlook for the markets on Friday is that of cautious optimism as the weekend session is likely to see truncated risk appetite, though the overall outlook is positive. Should the overseas cues be positive, expect some more upsides though the overhang of profit taking will continue to hound the advances.