Nifty likely to witness range of 4300-4170: Bhambwani

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Technical Analyst, Vijay Bhambwani:

The markets retraced after two strong sessions back to back. The higher levels failed to attract follow up buying support that was needed to sustain the upthrust. The technology segment was the out performer of the session as the perceived strength in the overseas markets kept sentiments optimistic. The traded volumes were higher as compared to the previous session, which is a negative indicator for an profit taking session - indicating possible distribution. The market breadth was positive as the BSE & NSE combined advance decline ratio was 2168 : 1648. The capitalisation of the breadth was negative as the BSE & NSE combined figures were Rs 13258 Crs : Rs 13513 Crs. That indicates selling on heavy weights. The NSE gained Rs 14382 Crs in market capitalisation.
 
The indices have closed in the lower end of the intraday range, with marginally positive market internals and higher volumes. The candle charts are indicating a crude gravestone "doji". The intraday range specified for Thursday between the 4335 / 4150 has held as the Nifty traded within the specified range.

The coming session is likely to witness a range of 4300 on advances. Support is likely at 4170 on declines, below which the 4140 maybe possible. The bullish pivot for the session will be at the 4270 and the bearish pivot at the 4240 levels. Traders need to watch the activity beyond these thresholds respectively for intraday guidance.

The market internals indicate a higher turnover due to the distribution at higher levels. The number of trades were higher and the average ticket size per trade was higher, indicating a strong selling bias. The capitalisation of the market was marginally higher in line with a profit taking session. The f&o cues (refer table below) show the bears pressing fresh shorts on the Nifty, indicating some more possible supply.

The outlook for the markets today is that of caution as the weekend factor and overseas cues may curb buying conviction

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