Nifty likely to witness range of 5900-5775: Bhambwani

Technical Analyst, Vijay Bhambwani:

The markets opened on a bullish note and ended the choppy session with continued gains as the bulls managed to keep the Nifty above the 5785 bullish pivot. The benchmark indices ended with approx 0.8 % gains at close. The traded volumes were higher as compared to the previous session, which is positive indicator for a bullish session, but hints of selling at higher levels. The market breadth was negative as the BSE & NSE combined advance decline ratio was 2106 : 2187. The capitalisation of the breadth was negative as the BSE & NSE combined figures were Rs 9435 Crs : Rs 13109 Crs. The NSE gained Rs 48168 Crs in market capitalisation.

The indices have closed in the median end of the intraday range as the bulls were able to support the markets at lower levels. The intraday range advocated for the Nifty between the 5845 / 5750 was overcome as the Nifty tested the 5872 levels - thereby exceeding our intraday wave count employed on the upside.

The coming session is likely to witness a resistance at the 5900 levels on advances. Support is likely at the 5775 below which the 5735 maybe tested. The bullish pivot for the session is likely at the 5840 levels above which the Nifty must stay throughout the session. The bearish pivot is at the 5810 levels below which fresh falls may occur. Traders must watch these levels for signs of trend determination in the coming session.

The daily candle chart of the Nifty shows a smaller bodied bullish candle, with a large upper wick which indicates selling on the upsides. The markets have logged eight bullish candles in a row (8 is a Fibonacci number). Should the bulls manage to keep the Nifty above the bullish pivot at 5840 consistently on Friday, the outlook will remain positive. On the flip side, sustaining below the 5810 levels may trigger declines. Weekend worries coupled with profit taking will calibrate the upsides.

The market internals indicate a higher turnover due to the selling pressure on advances. The number of trades were higher and the average ticket size per trade was higher, signaling higher retail presence in the markets. The capitalisation of the market was higher in line with a bullish session. The put call ratios indicate the bears squaring some shorts on declines.

The outlook for the markets today is that of guarded optimism as the bulls will have to keep the Nifty above the 5840 levels sustain ably.

The analyst is a Mumbai based author of India's first commodity trading guide book - "A Traders Guide to Indian Commodity Markets" and invites feedback at vijay@BSPLindia.com.

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