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Unwinding may limit upsides

Sunday, October 28, 2007

The markets opened on a sluggish note, but ended the day with gains, as players rolled over their long positions whole-heartedly ahead of the SEBI meet.

The traded volumes were higher than the previous session and the market breadth was positive as the combined exchange figures were 2,230:1,633.

The capitalisation of the breadth was also positive as the commensurate figures were Rs 20,960 cr:Rs 10,011 cr. The F&O figures for the previous session saw a 4.45 per cent increase in net long positions ahead of expiry, as players bought afresh.

The indices have closed at the upper end of intraday range, as the bulls managed to hold on to their initiative till the session’s end. Barring routine profit sales and expiry related considerations, no major sell-off was seen.

The intraday range specified for Thursday at 5,390/5,595 was superficially tested on the upsides as the markets traded within a predictable Fibonacci groove.

The markets accelerated after surpassing the 5520 pivot, with the aided bulls wresting control from the bears. The coming session is likely to witness an intraday range of 5655 on advances and 5480 on declines.

The bullish support pivot to watch on Friday will be 5,550, which should not be violated on a consistent trading basis if the upward momentum is to be maintained. The traded volumes and PCR need to be watched in real time to gauge the short-term direction.

The outlook for the markets on Friday is that of cautious optimism as the weekend factor and pre-festival unwinding may limit the upsides. The overall trend remains bullish though.

Posted by FR at 7:48 PM  


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