Nifty likely to witness resistance at 4965: Bhambwani

By Vijay L Bhambwani, CEO of BSPLindia.com

The markets opened on a cautious note and ended the session with gains as the bulls managed to keep the Nifty above the 4860 bullish pivot during the latter part of the session. The benchmark indices ended with approx 1.2% gains at close. The traded volumes were lower than 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 2823 : 1424. The capitalisation of the breadth was positive as the commensurate figures were Rs 7827 crore : Rs 3783 crore.

The indices have closed at the upper end of the intraday range as the bulls were able to offer support at lower levels during the session, aided by short covering on declines. The intraday range specified for the Nifty between the 4900 / 4775 has held as the Nifty trended largely within these levels, thereby validating our intraday levels. The coming session is likely to witness resistance at the 4965 levels on advances above which the 5050 maybe seen if the bears get squeezed ahead of expiry. Support is likely at the 4825 levels. The bullish pivot for the session is likely at the 4875 levels above which the Nifty must stay throughout the session. The bearish pivot is at the 4850 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 large bodied bullish "daki" candle after an indecisive spinning top on Friday - implying the return of the bulls, however temporary it maybe. Our expectations of the temporary bottom being fulfilled, we would like to see follow up buying support above the 4875 levels consistently on Tuesday. The Nifty sustaining below the 4850 levels may trigger a fresh bout of declines.

The market internals indicate a lower turnover due to the scepticism at higher levels 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 unavailable. The put call ratios indicate the bears ramping up shorts on advances.

The outlook for the markets on Tuesday is that of cautious optimism as the bulls will have to keep the Nifty above the 4875 levels sustain ably.

Mandatory disclosure - The analyst has no exposure to the scrips recommended above.