The markets opened on a strong note and ended off their intraday highs as the higher levels could not be sustained due to lack of buying support. The traded volumes were poor and the market breadth was marginally positive as the combined exchange figures were 1952:1889. The capitalisation was similarly positive as the commensurate figures were Rs 5,497 crore:Rs 5,136 crore.
The indices have closed at the lower end of the intraday spectrum as follow-up buying and traded volumes were abysmal. The intraday range specified for Monday at the 4400 / 4270 level held as the Nifty retraced from the 4399 mark itself, validating our wave count. The weak market internals indicate a desperate need for follow-up buying, without which a sustainable upmove may be elusive.
The oriental charts indicate caution as the closing has been near the open and the inverted "doji" formation has a "long shadow". The bulls will need to take the markets past the Monday intraday highs to rope in the retail buyers. The coming session is likely to witness a range of 4385 on advances and 4265 on declines. As long as the Nifty spot remains below the 4350 pivot, the bears will rule the roost.
The outlook for the markets on Tuesday is that of abundant caution as the bulls are clearly lacking buying conviction. Unless heavy duty buying support kicks in, expect short-term weakness.
RSI-2
