Nifty likely to witness range of 5840-5665: Bhambwani
The coming session is likely to witness a range of 5840 on advances. Support is likely at the 5665. The wide range is due to the unusually high base effect of Tuesday's range.
January 12, 2011 / 08:58 IST
Technical Analyst, Vijay Bhambwani:
The markets opened on an bullish note and ended the day with mild losses as the bulls failed to keep the Nifty above the 5850 bullish pivot throughout the session. The benchmark indices ended with approx 0.25 % 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 1560 : 2727. The capitalisation of the breadth was positive as the BSE & NSE combined figures were Rs 9186 Crs : Rs 8511 Crs. The NSE shed Rs 18728 Crs in market capitalisation. The indices have closed in the median 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 5865 / 5660 has held as the Nifty trended within these levels - thereby validating our intraday wave count employed. The coming session is likely to witness a range of 5840 on advances. Support is likely at the 5665. The wide range is due to the unusually high base effect of Tuesday's range. The bullish pivot for the session is likely at the 5780 levels and the bearish pivot at the 5750 levels. Traders must watch these levels for signs of trend determination in the coming session.The daily candle chart of the Nifty shows a doji candle with a small body and large wicks, indicating a tug-of-war between rival forces during the day. Fibonacci studies pointing towards the possibility of a mild bounce around the corner were validated and still hold. Note the Nifty is around the 5690 levels from where a pullback was seen in the past. For the bulls to prevail over the bears, it is important that the Nifty remain above the 5780 levels consistently on Wednesday. The net bias - cautious optimism on Wednesday as long as the Nifty spot trades above the 5780 bullish pivot.The market internals indicate a higher turnover due to the volatility. The number of trades were higher and the average ticket size per trade was higher, indicating a selling bias. The capitalisation of the market was lower in line with a downtick session. The put call ratios indicate the bears covering their positions marginally.The outlook for the markets today is that of cautious optimism as the bulls must hold the Nifty above the 5780 levels sustain ably to manage an upmove in the coming session. A mild pullback maybe expected.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!
