The markets underwent the weekend jitters as was expected and advocated in this column yesterday.

The benchmark indices closed with minor gains as the buying conviction was clearly wanting at higher levels. That the market breadth was negative and traded volumes were also higher adds to the possibility of a mild distribution on advances.

The BSE & NSE combined breadth was 1265 : 2449, whereas the capitalisation of the same was Rs 9338 crore : Rs 8377 crore. The derivatives data for the previous session indicate a minor increase in net long positions - a positive indicator before the expiry.

The markets have closed off their intraday perches and the benchmarks have ended at the lower end of the intraday range.

Coupled with a negative market breadth and higher traded volumes, the bulls are indicating reticence at higher levels.

The coming session is likely to witness an intraday range of 4595 on advances and 4537 on declines. Traders need to watch for signs of higher traded volumes and open interest beyond these levels to gauge the mood of the markets.

The run-up to expiry of the July derivative series is likely to witness a routine bear squeeze and higher volatility is likely in the coming sessions.

The outlook for Monday is that of cautious optimism as the overseas cues can have an exaggerated impact on the sentiments especially since markets have scaled such levels. I advocate trading small lots only.