Nifty likely to witness resistance at 5375: Bhambwani

Technical Analyst, Vijay Bhambwani:

The markets opened on an optimistic note and ended the session with mild gains after a see-saw session even as the bulls failed to hold the Nifty conclusively above the bullish pivot. The benchmark indices ended with approx 0.4 % gains at close. The traded volumes were lower as compared to the previous session, which is a negative indicator for a bullish session. Volumes have remained a sore point for the bulls in the last fortnight. The market breadth was negative as the BSE & NSE combined advance decline ratio was 1860 : 2423. The capitalisation of the breadth was negative as the BSE & NSE combined figures were Rs 6843 Crs : Rs 10101 Crs. The NSE gained Rs 19684 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 all levels. The intraday range advocated for the Nifty between the 5325 / 5150 has held as the Nifty more of less kept within these levels - thereby validating our intraday wave count employed. The coming session is likely to witness a resistance at 5375 on advances above which the 5425 maybe tested. Support is likely at the 5250 below which the 5200 maybe tested. The possibility of these levels holding as water tight compartments will be low as players will react to the budget proposals. The bullish pivot for the session is likely at the 5300 levels above which the Nifty must stay throughout the session. The bearish pivot is at the 5270 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 bearish hammer, with a large lower wick indicating ample support on dips. The overall daily range was of a lower top and bottom formation. Much will depend on emotional factors, today being the budget day. The bulls must keep the index above the bullish pivot of 5300 consistently on Monday to turn the tide. The market internals indicate a lower turnover due to the absence of buying conviction at higher levels. The number of trades were lower and the average ticket size per trade was lower, indicating a lack of participation on the buy side. The capitalisation of the market was higher in line with a bullish session. The put call ratios indicate the bears covering their shorts on declines. The outlook for the markets today is that of caution as the budget will be a dominant factor in the coming sesion. 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.