Nifty likely to witness range of 5725-5650: Bhambwani

Technical Analyst, Vijay Bhambwani:

The markets opened on a quiet note and ended the session with gains as the bulls managed to keep the Nifty above the 5625 bullish pivot. The benchmark indices ended with approx 0.6 % gains at close. The traded volumes were steady as compared to the previous session, which is positive indicator for a bullish session. The market breadth was negative as the BSE & NSE combined advance decline ratio was 1924 : 2487. The capitalisation of the breadth was negative as the BSE & NSE combined figures were Rs 6953 Crs : Rs 8667 Crs. There were indications of selling at higher levels. The NSE gained Rs 25364 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 5730 / 5610 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 5725 levels on advances above which the 5760 maybe seen. Support is likely at the 5650, below which the 5610 maybe tested. The bullish pivot for the session is likely at the 5690 levels above which the Nifty must stay throughout the session. The bearish pivot is at the 5665 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 large bodied bullish candle, with an upper wick which indicates resistance on the upsides. The session was marked by steady volumes but negative market breadth, which suggests scepticism at higher levels in the absolute short term. Should the bulls manage to keep the Nifty above the bullish pivot at 5690 consistently on Tuesday, the outlook will remain positive. On the flip side, sustaining below the 5665 levels may trigger declines.

The market internals indicate a steady turnover due to the buying support on dips. The number of trades were lower and the average ticket size per trade was higher, signaling improved 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 Index 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 5690 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.