Nifty likely to see intraday range of 4115-4305

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Technical analyst, Vijay L Bhambwani

The markets opened with a gap up and the rally persisted till the fag end of the session yesterday as the bear squeeze kept the upward momentum alive.

The market breadth was positive as the combined exchange figures were 2750 : 1041 and the capitalisation of the same was also positive as the figures were Rs 10870 crore: Rs 1945 crore. The F&O data for the previous session as the PCR was marginally lower on account of squaring up at lower levels.

The indices have closed at the upper end of the intraday range as the bears were on the back foot due to the strong overseas cues. Qualitatively speaking, the upmove was on weak legs as the traded volumes were subdued and the major trigger was external in nature. The pullback saw the Nifty spot remaining above the first threshold of 4208 level which is a critical floor support for now.

The upsides are likely to meet with some unloading from traders caught with purchases at higher levels which is essentially known as overhead supply in technical parlance. The 4210 level advocated as a resistance for Monday was stretched on the upside though the closing was at this level. The coming session is likely to see an intraday range of 4305 on advances and 4115 on declines. It is essential that upthrusts be on higher volumes if the move is to be sustainable.

The outlook for the markets today is that of guarded optimism and much will depend on the overseas cues as our markets are now caught in the tail wind of the US markets. Ignore big ticket trades for now.  

Disclosure - The analyst has no exposure to any scrip/s recommended above.