Nifty likely to witness range of 4410-4270: Bhambwani

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Technical Analyst, Vijay Bhambwani:

The markets exhibited weakness initially and turned on a dime as short covering at lower levels swung the day towards the bull camp. 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 1854 : 1957. The capitalisation of the breadth was positive as the BSE & NSE combined figures were Rs 19302 Crs : Rs 3314 Crs. That indicates a selling bias by the retail players and buying by larger hands.

The indices have closed in the upper end of the intraday range, with negative market internals and lower volumes. These are indications of mild buying or short covering. The intraday low on Wednesday was higher than the low made on June 25 2009, which is a minor cause for optimism as the June 25 intraday low is a Gann swing inflection point. Should the bulls manage to offer follow up buying support and take the Nifty past the 4450 levels (advocated as a trend determinator by me), expect the outlook to improve. The intraday range specified for Wednesday between the 4400 / 4175 has held as the Nifty traded traded within these parameters.

The coming session is likely to witness a range of 4410 on advances above which the 4435 levels maybe likely, provided the ticket size per trade is higher. Support is likely at 4270 on declines, below which the 4240 maybe likely. The bullish pivot for the session will be at the 4320 and the bearish pivot at the 4300 levels. Traders need to watch the activity beyond these thresholds respectively for intraday guidance.

The market internals indicate a lower turnover due to the initial weakness. 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 guarded optimism as the bulls will need to exert themselves to overcome the 4450 hurdle.

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