The markets opened on a cautious note and ended the day with gains, in the process shrugging off the weak overseas cues.

The benchmark indices gained over a percent albeit on lower volumes. Coming on a strong uptick session, that is a sign of minor concern and makes it crucial that follow up buying be strong.

The market breadth on a combined exchange basis was marginally negative as the figures were 1810 : 1867. The capitalisation of the same was positive as the combined exchange figures were Rs 10802 crore : Rs 4602 crore.

The indices have closed at the upper end of the intraday range and the market internals were none too convincing. That makes the upmove credited to the sustained short covering at lower levels.

As I have been mentioning in this space, historically, the pre expiry short squeeze is amply evident in the domestic markets. The intraday range specified for Monday at the 4537 / 4595 was bettered by the markets as the Nifty showed a rising intraday band on both parameters.

The coming session is likely to witness a range of 4669 on advances and 4569 on declines. Keep watching the average traded price of the derivative contracts vis-a-vis the spot and the last traded prices to gauge the near term moods of the players.

The outlook for Tuesday is that of continued optimism subject to the overseas cues being neutral to positive. Bulls may continue to hold their long positions and even roll over their July commitments to the next series.