Nifty likely to witness range of 5820-5750: Bhambwani

Technical Analyst, Vijay Bhambwani:

The markets opened on a bullish note and ended the session with continued gains as the bulls managed to keep the Nifty above the 5740 bullish pivot. The benchmark indices ended with approx 0.9 % gains at close. The traded volumes were lower as compared to the previous session, which is negative indicator for a bullish session, but was along expected lines due to the Indo-Pak match. The market breadth was positive as the BSE & NSE combined advance decline ratio was 3206 : 1099. The capitalisation of the breadth was positive as the BSE & NSE combined figures were Rs 10141 Crs : Rs 5335 Crs. The NSE gained Rs 68279 Crs in market capitalisation.

The indices have closed in the upper 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 5800 / 5680 has held as the as the Nifty trended within these levels - thereby validating our intraday wave count employed.

The coming session is likely to witness a resistance at the 5820 levels on advances above which the 5845 maybe seen. Support is likely at the 5750 below which the 5725 maybe tested. The bullish pivot for the session is likely at the 5785 levels above which the Nifty must stay throughout the session. The bearish pivot is at the 5770 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 an upper wick which indicates mild selling on the upsides. The markets have logged seven bullish candles in a row. Should the bulls manage to keep the Nifty above the bullish pivot at 5785 consistently on Thursday, the outlook will remain positive. On the flip side, sustaining below the 5770 levels may trigger some declines.

The market internals indicate a lower turnover due to the lack of buying support on advances. The number of trades were lower and the average ticket size per trade was higher, signaling lower retail participation in the markets. The capitalisation of the market was higher in line with a bullish session. The put call ratios indicate the bears ramping up shorts on advances.

The outlook for the markets today is that of guarded optimism as the bulls will have to keep the Nifty above the 5785 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.