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Derivatives expiry calls for caution

Sunday, October 28, 2007

The markets consolidated after a big move yesterday, as was expected. Routine profit sales were expected at higher levels as short term bulls would attempt to lock in the gains.

The traded volumes were higher compared with the previous session, as smart money distributed stock at higher levels.

The market breadth was positive as the combined exchange advance decline ratio was 2177:1686. The capitalisation of breadth was also positive as the commensurate figures were Rs 18,999 cr:Rs 8,509 cr.

The F&O data for the previous session indicated a ramp- up in fresh longs by the bulls as the undertone was optimistic.

The indices have closed at the median point of the day, as the bulls and bears attempted to gain control. The 5280/5665 level advocated for Wednesday were not tested in either direction.

The coming session is likely to witness an intraday range of 5595 on advances and 5390 on declines, as the the F&O expiry is the dominant trigger in the near term.

The traded volumes and open interest will play a key role in determining the near term trend.

The outlook for the markets on Thursday is that of customary caution as it marks the end of near-month derivatives contracts series. Avoid fresh aggressive positions.

Posted by FR at 7:43 PM  

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Investment in equity shares has its own risks. Sincere efforts have been made to present the right investment perspective.The information contained herein is based on analysis and up on sources that we consider reliable. I, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and I am not responsible for any loss incurred based upon it.& take no responsibility whatsoever for any financial profits or loss which may arise from the recommendations given in this blog.