Nifty has support at 4825: Vijay Bhambwani

Technical Analyst, Vijay Bhambwani:

The markets opened on an cautiously optimistic note and ended the session with losses as the bulls failed to keep the Nifty above the 4935 bullish pivot during the session. The benchmark indices ended with approx 1.2 % losses at close. The traded volumes were lower than 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 1929 : 2372. The capitalisation of the breadth was negative as the commensurate figures were Rs 3041 Crs : Rs 8780 Crs. The NSE shed Rs 59762 Crs in market capitalisation.
The indices have closed at the lower end of the intraday range as the bulls were unable to offer support at higher levels during the session. The intraday range specified for the Nifty between the 5025 / 4875 has held as the Nifty bounced exactly from 4875 levels, thereby validating our intraday counts.
The coming session is likely to witness resistance at the 4950 levels on advances above which the 5025 maybe seen (low probability event as of now) if the bears cover aggressively, on expiry. Support is likely at the 4825 levels. The bullish pivot for the session is likely at the 4935 levels above which the Nifty must stay throughout the session. The bearish pivot is at the 4900 levels below which declines may occur. Traders must watch these levels for signs of trend determination in the coming session.
The daily candle chart of the Nifty shows a larger bodied bearish candle within the previous days range (inside day pattern as per western bar charts). These are signs of a market preparing to make a decisive move in either direction. Staying above the 4935 level with higher volumes and open interest will see the bulls retain their initiative. The Nifty sustaining below the 4900 levels may trigger a fresh bout of declines.
The market internals indicate a lower turnover due to the lack of buying enthusiasm. The number of trades were lower and the average ticket size per trade was lower, which indicates poor retail buying. The capitalisation of the market was lower in line with a bearish session. The put call ratios indicate the bears squaring up shorts ahead of expiry.
The outlook for the markets on Thursday is that of guarded optimism as the bulls will have to keep the Nifty above the 4935 levels sustain ably.
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. Mandatory disclosure - the analyst has no exposure to the scrips recommended above.