The markets opened on a weak note and ended off their intraday lows as short covering-cum-fresh buying emerged at lower levels to resuscitate the markets.

Traded volumes shrank as the high dose of intraday volatility spooked the retail and day traders alike. After the negative chart formation of the previous session, the short term charts formed a mildly bullish chart formation called a “dragonfly doji” on the Japanese charts.

This formation is made when the intraday low is deeply lower than the opening and closing which are almost at same levels and both are at the upper end of the intraday band.

The market breadth was expectedly negative as the BSE & NSE combined figures were 1575 : 2159 and the capitalisation on the same parameters were Rs 8254 crore : Rs 8678 crore.

The derivatives figure for the previous session indicate a marginal attrition in net long positions as bulls unwound marginally.

The indices have closed at the upper end of the intraday range as the lower levels have seen buying. As advocated yesterday, the markets are undergoing a consolidation phase and the same is likely to be a brief phase as the markets are poised within a bullish channel on the daily charts.

The coming session is likely to witness an intraday range of 4536 on advances and 4464 on declines. As long as traded volumes and market breadth are positive and the Nifty spot manages to stay above the 4490 levels, expect the sessions to belong to the bulls.

The outlook for the coming session is that of consolidation and should the external cues be positive to neutral, expect the domestic sentiments to be firm.

Avoid large-scale fresh purchases till conclusive evidence emerges to support such a view - especially on a breakout above the previous session’s highs.