Nifty likely to witness range of 4250-4150: Bhambwani

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Technical Analyst, Vijay Bhambwani:

The markets retraced some of the declines of budget day as I had advocated a possible partial pullback. This is along expected lines after a big move day.  The traded volumes were lower as compared to the previous session, which is a negative indicator for an uptick session. The market breadth was negative as the BSE & NSE combined advance decline ratio was 1569 : 2195. The capitalisation of the breadth was positive as the BSE & NSE combined figures were Rs 11967 Crs : Rs 10854 Crs. That indicates selling in small caps and buying in largecaps.

The indices have closed in the upper end of the intraday range, with negative market internals and lower volumes. These are indications of of a short covering based upmove. The intraday range specified for Tuesday between the 4380 - 4030 has held as the Nifty traded within these thresholds.

The coming session is likely to witness a range of 4250 on advances, above which the 4280 maybe possible. Support is likely at 4150 on declines, below which the 4100 maybe seen. The range is narrowing as volatility shrinks. The bullish pivot for the session will be at the 4200 and the bearish pivot at the 4185 levels. Traders need to watch the activity beyond these thresholds respectively for intraday guidance.

The market internals indicate a lower turnover due to the lack of buying conviction. The number of trades were lower and the average ticket size per trade was lower, indicating a weak buying bias. The capitalisation of the market was higher in line with an uptick session.

The outlook for the markets today is that of caution as the overseas cues are weak and the bulls are on the back foot.

Disclosure: The analyst has no exposure to the scrips recommended above.