Nifty likely to witness range of 5535-5430: Bhambwani

Technical Analyst, Vijay Bhambwani:

The markets opened on an optimistic note and ended the session with small gains in a tight range bound trade as I had anticipated. The benchmark indices ended with approx 0.25 % gains at close. The traded volumes were lower as compared to the previous session, which is a negative indicator for a bullish session, volume based buying still eludes the bulls. The market breadth was positive as the BSE & NSE combined advance decline ratio was 2553 : 1661. The capitalisation of the breadth was negative as the BSE & NSE combined figures were Rs 6876 Crs : Rs 7080 Crs. The NSE gained Rs 14684 Crs in market capitalisation.

The indices have closed in the median end of the intraday range as the bulls were able to support the markets at lower levels in a range bound session. The intraday range advocated for the Nifty between the 5550 / 5400 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 5535 on advances. Support is likely at the 5430 levels. The bullish pivot for the session is likely at the 5490 levels and the bearish pivot at the 5470 levels. 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 inverted doji candle, which indicates uncertainty during the day along advocated lines. The bulls are pausing for breath and need to return with force if they are to retain their initiative. The bulls must keep the index above the bullish pivot of 5490 decisively for sustaining the upward momentum on Thursday.

The market internals indicate a lower turnover due to lack of buying conviction at lower levels. The number of trades were lower and the average ticket size per trade was lower, indicating poor retail buying bias. The capitalisation of the market was higher in line with a bullish session. The put call ratios indicate the bears continued stepping up their shorts on advances.

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.