More unwinding looks possible

TECHNICALS

Vijay Bhambwani / Mumbai February 8, 2008

The markets opened with a negative bias and closed with significant losses led by selling in frontline index heavies. The traded volumes were marginally higher as the intraday volatility and wider range saw broader day trader participation.
The market breadth was negative as the combined exchange figures were 1027:2966 and the capitalisation of breadth was also negative, with the figures being Rs 1363 crore:Rs 18,892 crore.
The indices have closed at lower end of the intraday range and on continued negative market internals. The traded volumes were marginally higher. The intraday range specified for Thursday at 5190/5450 was violated on declines as the selling pressure was palpable.
The coming session is likely to witness an intraday range of 4990 on declines and 5275 on advances. The declining daily range indicates a lower top and bottom formation. Watch the traded volumes in case of an drawdown below the 5000 levels, which will indicate stepped up bearish aggression.
The number of trades increased and the average ticket size was lower, indicating the absence of stronger hands. The capitalisation was lower in line with a downtick session.
The outlook for the Friday remains guarded as the weekend factor will go against buying momentum. Should the overseas cues turn negative, expect more unwinding. Avoid big ticket trades for now.