Nifty likely to witness range of 5450-5375: Bhambwani

Technical Analyst, Vijay Bhambwani:

The markets opened on a bullish note and ended the session with gains as the bulls managed to keep the Nifty above the 5390 bullish pivot. The benchmark indices ended with approx 0.8 % gains at close. The traded volumes were steady as compared to the previous session, but lower than the average volumes, which is negative indicator for a bullish session. The market breadth was positive as the BSE & NSE combined advance decline ratio was 2423 : 1853. The capitalisation of the breadth was positive as the BSE & NSE combined figures were Rs 6994 Crs : Rs 4606 Crs. The NSE gained Rs 56502 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 5450 / 5325 has held 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 5450 levels on advances above which the 5465 maybe seen. Support is likely at the 5375 below which the 5360 maybe seen. The bullish pivot for the session is likely at the 5410 levels above which the Nifty must stay throughout the session. The bearish pivot is at the 5390 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 small bodied bullish candle, indicating a pullback after a 3 day decline. Follow up buying will still remain a critical factor as volumes have been lower than convincing levels, for a sustained upmove. Should the bulls manage to keep the Nifty above the bullish pivot at 5410 consistently on Wednesday, the outlook will be positive. On the flip side, sustaining below the 5390 levels may trigger declines.
The market internals indicate a steady turnover due to the lack of whole hearted buying support on advances. The number of trades were higher and the average ticket size per trade was lower, indicating poor 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 cautious optimism as the bulls will have to keep the Nifty above the 5410 levels sustainably.
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.