Nifty likely to witness range of 4840-4680: Bhambwani

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Technical Analyst, Vijay Bhambwani:

The markets opened on a steady note and ended with mild gains as the bulls managed to hold the 4750 pivot level. The benchmark indices gained under 0.25 % at close. The traded volumes were lower than average as compared to the previous 10 sessions, which is a negative indicator for a bullish session. The market breadth was negative as the BSE & NSE combined advance decline ratio was 1918 : 2154. The capitalisation of the breadth was also negative as the BSE & NSE combined figures were Rs 6560 crs : Rs 11587 crs. The Nifty gained Rs 4469 Crs in market capitalisation.

The indices have closed in the upper end of the intraday range as the bulls offered buying support at lower levels. The intraday range advocated for the Nifty between the 4800 / 4675 has held as the Nifty traded exactly within these levels - thereby validating our wave count.

The coming session is likely to witness 4840 on advances above which the 4880 maybe seen - a low probability event. Support is likely at the 4680 levels below which the 4600 maybe seen. The bullish pivot for the session is likely at the 4755 levels and the bearish session at the 4720 levels. Traders must watch these levels for signs of trend determination in the coming session.

The market internals indicate a higher turnover due to the mock session's low base effect. The number of trades were higher and the average ticket size per trade was higher, indicating a higher selling bias. The capitalisation of the market was higher in line with an uptick session. The f&o cues show the bears squaring up shorts on declines.

The outlook for the markets today is that of caution as the bulls must hold the Nifty above the 4755 levels sustainably to extend the upmove. The overseas cues are likely to weigh on the sentiments.

The columnist is the author of "A Traders Guide to Indian Commodity Markets" published by Network 18 (click here to buy the book) and invites feedback at vijay@BSPLindia.com or (022) 23438482.

Mandatory disclosure - the analyst has no exposure to the scrips recommended above.