Nifty likely to witness range of 5525-5400: Bhambwani
The coming session is likely to witness a resistance at 5525 on advances. Support is likely at the 5400 levels. The bullish pivot for the session is likely at the 5490 levels above which the Nifty must stay throughout the session.
February 23, 2011 / 08:06 IST
Technical Analyst, Vijay Bhambwani:
The markets opened on a cautious note and ended the session with losses as the bulls failed to keep the Nifty above the bullish pivot. The benchmark indices ended with approx 0.75 % losses at close. The traded volumes were higher as compared to the previous session, which is a negative indicator for a bearish session. Volumes are rising on bearish days and falling on bullish ones, indicating distribution at higher levels. The market breadth was negative as the BSE & NSE combined advance decline ratio was 1587 : 2679. The capitalisation of the breadth was negative as the BSE & NSE combined figures were Rs 5237 Crs : Rs 10390 Crs. The NSE shed Rs 51189 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 higher levels. The intraday range advocated for the Nifty between the 5600 / 5450 was mildly violated as the Nifty tested the 5437 levels - thereby exceeding our intraday wave count employed on the downside. The coming session is likely to witness a resistance at 5525 on advances. Support is likely at the 5400 levels. The bullish pivot for the session is likely at the 5490 levels above which the Nifty must stay throughout the session. The bearish pivot is at the 5465 levels which must be defended on dips, failing which steeper 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 bearish inside candle, which indicates the bulls being under pressure as volumes based selling bias overwhelmed the buyers camp. Volumes have been our concern and the lack of forceful follow up buying was eminently felt on Tuesday. The bulls must keep the index above the bullish pivot of 5490 consistently on Wednesday to turn the tide.The market internals indicate a higher turnover due to the selling pressure at higher levels. The number of trades were higher and the average ticket size per trade was higher, indicating a higher selling bias. The capitalisation of the market was lower in line with a bearish session. The put call ratios indicate the bears squaring up their index shorts on declines ahead of expiry.The outlook for the markets today is that of cautious optimism as the bulls must hold the Nifty above the 5490 levels sustain ably to manage an upmove in the coming session.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. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
