Nifty likely to witness range of 5975-5750: Bhambwani

Technical Analyst, Vijay Bhambwani:

The markets opened on an bullish note and ended the day with strong gains as the bulls managed to keep the Nifty above the 5780 bullish pivot in a highly volatile session. The benchmark indices ended with approx 2 % gains at close. The traded volumes were higher compared to the previous session, which is a positive indicator for a bullish session. The market breadth was positive as the BSE & NSE combined advance decline ratio was 3662 : 2100. The capitalisation of the breadth was positive as the BSE & NSE combined figures were Rs 16375 Crs : Rs 2921 Crs. The NSE gained Rs 101314 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 lower levels aided by some bear covering at dips. The intraday range advocated for the Nifty between the 5840 / 5665 was overcome as the Nifty tested the 5874 levels - thereby exceeding our intraday wave count employed on the upside.

The coming session is likely to witness a range of 5975 on advances. Support is likely at the 5750. The wide range is due to the unusually high base effect of Wednesday's range. The bullish pivot for the session is likely at the 5815 levels and the bearish pivot at the 5775 levels. Traders must watch these levels for signs of trend determination in the coming session.

The daily candle chart of the Nifty shows a bullish doji candle with a big body and a large lower wick, indicating ample support on declines during the day. Fibonacci studies pointing towards the possibility of a mild bounce around the corner were validated and still hold - subject to bulls building upon their new found initiative with follow up buying. Note the Nifty support at 5690 levels from where a pullback was seen in the past has held, establishing that level as a significant inflection point. For the bulls to prevail over the bears, it is important that the Nifty remain above the 5815 levels consistently on Thursday. The net bias - optimism on Thursday as long as the Nifty spot trades above the 5815 bullish pivot.

The market internals indicate a higher turnover due to the strength. The number of trades were higher and the average ticket size per trade was lower, indicating a retail buying bias. The capitalisation of the market was higher in line with an uptick session. The put call ratios indicate the bears ramping up their positions on advances.

The outlook for the markets today is that of optimism as the bulls must hold the Nifty above the 5815 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.