Nifty likely to witness range of 6125-6030: Bhambwani

Technical Analyst, Vijay Bhambwani:

The markets opened on a weak footing and ended the day with continued losses as the bulls failed to keep the Nifty above the 6160 bullish pivot throughout the session. Signs of profit sales were evident yet again at higher levels. The benchmark indices ended with under 1 % losses at close. The traded volumes were lower compared to the previous session, which is a routine indicator for a bearish session. The market breadth was negative as the BSE & NSE combined advance decline ratio was 1339 : 2977. The capitalisation of the breadth was negative as the BSE & NSE combined figures were Rs 5818 Crs : Rs 11326 Crs. The NSE shed Rs 64308 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 6185 / 6100 was violated as the Nifty tested the 6062 levels - thereby exceeding our intraday wave count employed.

The coming session is likely to witness a range of 6125 on advances. Support is likely at the 6030. The bullish pivot for the session is likely at the 6110 levels and the bearish pivot at the 6090 levels. Traders must watch these levels for signs of trend determination in the coming session.

The daily candle chart of the Nifty shows a bigger bearish candle with a lower wick, indicating mild support on dips during the day. As advocated yesterday, the bullish momentum was under threat of slackening of the pace even in the larger "W" shaped bullish pattern, as long as follow up buying was missing. For the bulls to prevail over the bears, it is important that the Nifty remain above the 6110 levels consistently on Thursday. The net bias - cautious optimism on Thursday as long as the Nifty spot trades above the 6110 bullish pivot.

The market internals indicate a lower turnover due to the lack of buying conviction on dips. The number of trades were lower and the average ticket size per trade was lower, indicating a poor retail buying bias. The capitalisation of the market was lower in line with a downtick session.

The outlook for the markets today is that of guarded optimism as the bulls must hold the Nifty above the 6110 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.