Nifty likely to witness range of 5760-5600: Bhambwani
The coming session is likely to witness a range of 5760 on advances. Support is likely at the 5600. The wide range is due to the large base effect of Tuesdays range.
January 27, 2011 / 08:12 IST
Technical Analyst, Vijay Bhambwani:
The markets opened on an optimistic note and ended the day with wide spread losses as the bulls failed to hold the Nifty above the 5735 bullish pivot throughout the session. The benchmark indices ended with approx 0.95 % losses at close. The traded volumes were higher compared to the previous session, which is a negative indicator for a bearish session. The market breadth was negative as the BSE & NSE combined advance decline ratio was 1702 : 2580. The capitalisation of the breadth was negative as the BSE & NSE combined figures were Rs 7037 Crs : Rs 9626 Crs. The NSE shed Rs 41630 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 5800 / 5700 was violated marginally on the downsides as the Nifty tested the 5680 levels intraday - thereby exceeding our intraday wave count employed on the downside. The coming session is likely to witness a range of 5760 on advances. Support is likely at the 5600. The wide range is due to the large base effect of Tuesdays range. The bullish pivot for the session is likely at the 5760 levels and the bearish pivot at the 5725 levels. Traders must watch these levels for signs of trend determination in the coming session.The daily candle chart of the Nifty shows a bearish "daki" candle formation, indicating a bearish outlook in the absolute near term. The bulls will have to manage atleast a bullish piercing pattern to halt the decline or face even further cuts on the Nifty. For the bulls to prevail over the bears, it is important that the Nifty remain above the 5760 levels consistently on Thursday.The market internals indicate a higher turnover due to the selling pressure on advances. The number of trades were higher and the average ticket size per trade was higher, indicating a concerted 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 short positions on declines.The outlook for the markets today is that of caution as the bulls must hold the Nifty above the 5360 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.
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