The markets opened with a gap down pattern and the weakness persisted on the back of negative overseas cues as the August derivatives series commenced on a nervous note. Traded volumes spiked higher which is a negative indicator on a downtick session.

The market breadth was expectedly negative as the BSE & NSE combined figures were 711 : 2919. The capitalisation of the breadth was also negative as the combined exchange figures were Rs 2698 crs : Rs 19368 crs.

The F&O data for the previous session marked one of the highest rollover of short positions in recent times as the bears held their positions.

The indices have closed at the lower end of the intraday range and that too with weak market internals. The warning signals of continued "gravestone dojis" on the July 17, July 20 and July 24 were warnings of weakness as I have been advocating upsides facing resistance from the profit sales from short term players.

The ferocity of the fall on July 27 was exacerbated by the overseas cues which acted as a catalyst. The intraday range indicated for Friday was violated convincingly on the downsides as the NIfty closed sharply lower.

The coming few sessions will see support at the 4376 levels which is a 50 per cent retracement of the current upmove. Traders should watch whether this support is violated and on what volumes for signs of immediate trend determination.

The outlook for the market on Monday is that of some more weakness as the bulls attempt to fund their long positions. The overseas cues too will play a significant role in determining the immediate outlook. The possibility of higher volatility remains fair and I continue to advocate abstinence from aggressive fresh positions in either direction as has been advised in the last few days.