Nifty likely to witness range of 4940-4830: Bhambwani

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Technical Analyst, Vijay Bhambwani:

The markets opened on a positive note and ended with small losses as the bulls could not keep the Nifty above the 4860 bullish pivot. The overseas cues prompted the initial rally, followed by profit sales that weighed heavily on the bulls. Banking and midcap stocks were the relative out performers of the session. The benchmark indices ended with almost 0.30 % losses, thereby capping the winning streak. The traded volumes were higher which is a negative indicator for a bearish session. The market breadth was negative as the BSE & NSE combined advance decline ratio was 1844 : 2189. The capitalisation of the breadth was positive as the commensurate figures were Rs 13197 Crs : Rs 11663 Crs. The NSE gained Rs 8438 Crs in market capitalisation.

The indices have closed in the lower end of the intraday range as the bears persisted in selling till the end of the session. The intraday range advocated between the 4980 / 4820 has held as the Nifty traded within these parameters.

The coming session is likely to witness a range of 4940 on advances above which the 5000 level maybe seen - a long shot probability. Support maybe seen at the 4830 levels on declines, below which the 4810 maybe seen. The bullish pivot for the session is likely at the 4915 levels and the bearish pivot at the 4890 levels. Traders need to watch the these parameters for signs of breakout / breakdown from the previous sessions range.

The market internals indicate a higher turnover due to the selling at higher levels. 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 divergence with a downtick 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 need to hold the Nifty above the 4915 mark. Overseas cues can weigh on the bulls.

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

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