Nifty likely to witness range of 6180-6120: Bhambwani

Technical Analyst, Vijay Bhambwani:

The markets opened on a firm footing and ended the day with mild gains even as the bulls managed to keep the Nifty above the 6135 bullish pivot throughout the session. Signs of profit sales were evident at higher levels in an illiquid session. The benchmark indices ended with under 0.5 % gains at close. The traded volumes were lower compared to the previous session, which is a negative indicator for a bullish session. The market breadth was positive as the BSE & NSE combined advance decline ratio was 3117 : 1225. The capitalisation of the breadth was negative as the BSE & NSE combined figures were Rs 6352 Crs : Rs 7819 Crs. The NSE gained Rs 42104 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 6175 / 6100 has held loosely as the Nifty retraced from the 6178 levels - thereby validating our intraday wave count employed.

The coming session is likely to witness a range of 6180 on advances above which the 6200 maybe seen. Support is likely at the 6120. The bullish pivot for the session is likely at the 6170 levels and the bearish pivot at the 6155 levels. Traders must watch these levels for signs of trend determination in the coming session.

The daily candle chart of the Nifty shows a small bullish candle with no upper wick, indicating resistance at higher levels. As advocated yesterday, the bullish candle body size was compressing for the prior 3 days in a row, indicating a slackening of the pace of the upthrust in the larger "W" shaped bullish pattern. For the bulls to prevail over the bears, it is important that the Nifty remain above the 6170 levels consistently on Tuesday. The net bias - cautious optimism on Tuesday as long as the Nifty spot trades above the 6170 bullish pivot.

The market internals indicate a lower turnover due to the lack of buying on advances. The number of trades were lower and the average ticket size per trade was lower, indicating a truncated retail buying. The capitalisation of the market was higher in line with an uptick session. The f&o cues are not available from NSE.

The outlook for the markets today is that of guarded optimism as the bulls must hold the Nifty above the 6170 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.