The markets opened with a gap and closed off the intraday lows as the local players shrugged off the weak global cues to lend support at lower levels.

Short covering too was seen at lower levels as the bears locked in gains. Traded volumes were in line with the previous session as the market participation was steady during the day.

The advance decline ratio on a combined exchange basis pointed towards a selling bias as the figures were 1428 : 2286. The capitalisation of the same was also negative as the commensurate figures were Rs 4563 cr : Rs 8687 cr.

The indices have closed at the median point of the day as the players showed a tendency to bottom fish during the session. That the market breadth was negative and the traded volumes were in line with the previous session indicate that the pressure remains at higher levels and the outlook is that of a relief rally in the near term.

The session being a downtick one, and the closing significantly above the intraday lows, a hammer has been formed on the Japanese candle charts which indicates the bulls attempting to apply brakes on the declines.

The 4355 / 4477 range specified for Monday was violated on the downsides as the overseas cues were largely responsible for the attrition. The closing was near the specified support level, indicating a possibility of a minor pullback on Tuesday.

The intraday range is likely to be at the 4424 on advances and the 4254 on declines. Traders need to specifically watch the 4312 levels on Tuesday for signs of support in the near term.

The outlook for the markets on Tuesday is that of guarded optimism but the overseas cues maybe a deciding factor in the absolute short term. Avoid pressing fresh short sales till compelling evidence surfaces to support such a move.