The domestic markets validated traders' opinion that the global integration of our markets was near total as the benchmark indices gained on the back of overseas cues.

Though early gains were erased on the back of profit taking at higher levels, indicating a lack of buying conviction at higher levels. Traded volumes were higher than the previous session as intraday traders kept the short-term interest alive and bears covered shorts at lower levels.

The combined exchange market breadth was positive as the figures were 2384 : 1303. The capitalisation of the breadth was also positive as the combined exchange figures were Rs 10755 crs : Rs 3218 crs.

The F&O data for the previous session indicated a 2.63 per cent increase in net long positions, indicating buying at declines.

The indices have closed off their intraday highs at the lower end of the intraday range. That indicates pressure at higher levels and the 4424 resistance expected for Tuesday was not tested, thereby underscoring the lack of buying conviction.

The positive market breadth and marginal increase in traded volumes does hold out some comfort but cannot be entirely relied upon to initiate fresh long positions.

The coming session is likely to witness an intraday range of 4397 on advances and 4315 on declines. It is increasingly apparent that the 4300 / 4310 band is emerging as a critical short-term support as per price retracement / Fibonacci studies. Day traders need to watch this threshold very carefully for the coming few sessions.

The outlook for the markets on Wednesday is likely to be that of guarded optimism and significantly influenced by the US FOMC cues. Big ticket trades must still be avoided.