Nifty likely to witness range of 5325-5150: Bhambwani

Technical Analyst, Vijay Bhambwani:

The markets opened on a negative note and ended the session with sizable losses as the bulls failed to keep the Nifty above the bullish pivot. The benchmark indices ended with approx 3.5 % losses at close. The traded volumes were higher as compared to the previous session, which is a negative indicator for a bearish session. Volumes rising on a declining day warns of selling pressure. This volumes yardstick has been the mainstay of our concerns in the recent days. The market breadth was negative as the BSE & NSE combined advance decline ratio was 810 : 3501. The capitalisation of the breadth was negative as the BSE & NSE combined figures were Rs 3215 Crs : Rs 18708 Crs. The NSE shed Rs 170837 Crs in market capitalisation.

The indices have closed in the lower end of the intraday range as the bulls were unable to support the markets at all levels. The intraday range advocated for the Nifty between the 5480 / 5350 was violated as the Nifty tested the 5242 levels - thereby exceeding our intraday wave count employed on the downside.

The coming session is likely to witness a resistance at 5325 on advances. Support is likely at the 5150. The wide range is due to the high base effect of Thursdays intraday range. The bullish pivot for the session is likely at the 5310 levels above which the Nifty must stay throughout the session. The bearish pivot is at the 5290 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 bearish candle, which closed the open bullish gap and ended hopes of a short term pullback rally. The bulls must keep the index above the bullish pivot of 5310 consistently on Friday to turn the tide - a tough call in view of the weekend factor.

The market internals indicate a higher turnover due to the selling bias at higher levels. The number of trades were higher and the average ticket size per trade was higher, indicating a panic selling bias. The capitalisation of the market was lower in line with a bearish session. The put call ratios indicate the bears maintaining short bias post expiry.

The outlook for the markets today is that of caution as the bulls must hold the Nifty above the 5310 levels sustain ably to manage an upmove in the coming session - in view of the weekend, a tough task to manage.

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.