Nifty likely to witness range of 6110-5975: Bhambwani
The coming session is likely to witness a range of 6110 on advances. Support is likely at the 5975. The bullish pivot for the session is likely at the 6085 levels and the bearish pivot at the 6055 levels.
January 07, 2011 / 08:13 IST
Technical Analyst, Vijay Bhambwani:
The markets opened on an optimistic note and ended the day with continued losses as the bulls failed to keep the Nifty above the 6110 bullish pivot throughout the session. Profit sales were evident again at higher levels. The benchmark indices ended with approx 0.5 % losses at close. The traded volumes were lower 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 1350 : 2930. The capitalisation of the breadth was negative as the BSE & NSE combined figures were Rs 5260 Crs : Rs 11755 Crs. The NSE shed Rs 55043 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 6125 / 6030 was violated marginally as the Nifty tested the 6022 levels - thereby exceeding our intraday wave count employed on the downside by a narrow margin. The coming session is likely to witness a range of 6110 on advances. Support is likely at the 5975. The bullish pivot for the session is likely at the 6085 levels and the bearish pivot at the 6055 levels. Traders must watch these levels for signs of trend determination in the coming session.The daily candle chart of the Nifty shows a big bearish candle with a lower wick, indicating mild support on dips during the day. The session marked the fourth consecutive day of declines as bulls shied away from offering follow up support. For the bulls to prevail over the bears, it is important that the Nifty remain above the 6085 levels consistently on Friday. Being a weekend session may weigh on the bulls as overnight buying conviction is likely to be limited. The net bias - caution on Friday as long as the Nifty spot trades below the 6055 bearish pivot.The market internals indicate a higher turnover due to the selling pressure on advances. The number of trades were lower 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 caution as the bulls must hold the Nifty above the 6085 levels sustain ably to manage an upmove in the coming session. Weekend worries may keep buying conviction subdued.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!
