Markets may remain in range-bound trading

The period September 1-7 under review saw markets reopen after a festival holiday on Wednesday. They opened with sharp losses, were then flat on Friday, gained on Monday, again flat on Tuesday and ended the period with losses on Wednesday. In short, there were gains on one day, losses on two days and flat on two days. BSE Sensex lost 508.16 points or 0.86 per cent to close at 59,028.91 points, while Nifty lost 134.90 points or 0.77 per cent to close at 17,624.40 points.

Dow Jones continued their poor show and lost on four of the five trading sessions. Dow lost 365.79 points or 1.16 per cent to close at 31,145.30 points. Worries about inflation and rate hikes seem to be keeping Dow under pressure.

In primary market news, shares of Dreamfolks Services Limited listed on Tuesday and fared well on expected lines. Shares which were issued at Rs326, saw a discovered price of Rs505 on BSE, a high of Rs550 and closed at Rs462.65. On Wednesday, shares lost some ground and closed lower at Rs451.65.

The issue from Tamilnad Mercantile Bank Limited, which had tapped the capital markets with its fresh issue from Monday to Wednesday (September 5-7) was subscribed 2.85 times, minutes before the issue closed for subscription. This is the first issue under the new guidelines where the money has to be blocked. Final figures would be uploaded by 7pm after taking care of blocking of funds.

Markets are unsure of the trend. They seem to be moving in a broad range and are making both sided moves on a regular basis. To move out of this sideways move, we need to make a decisive move and break either the support or cross the resistances. Unfortunately, we do not seem to have the conviction for either of that.

Coming to the September 8-14 period, markets would remain range bound like the previous week. Our markets would find strong resistance at the 17,750-800 levels and 59,450-59,550 levels. In case they do manage to break these levels for any reason, the previous tops made at 18,000 and 60,400 would be very strong resistances in the period coming up. Strong support exists at 17,350 and 58,200. If these break then the next level would be 17,000-17,050 and 57,250-57,350. For a clear trend to emerge, 17,000 and 57,250 on the lower side and 18,000 and 59,550 on the upper side need to be decisively broken. Currently we have no news or momentum in the markets to break these levels. The strategy for the period ahead would be to continue selling on rallies and buying on sharp dips. Markets are in a trading zone and they need to make up their mind where they are headed in the medium term. It may make sense to look at select mid-cap and small-cap stocks in the interim period instead.

(The author is the founder of

Kejriwal Research and Investment Services, an advisory firm)