Nifty likely to witness range of 5125-5000: Bhambwani

Technical Analyst, Vijay Bhambwani:

The markets opened on a nervous note and ended the session with gains even as the bulls failed to keep the Nifty above the 5095 bullish pivot throughout the session. The benchmark indices ended with approx 0.5 % gains at close. The traded volumes were higher than the previous session which is a positive indicator for an upthrust session. The market breadth was negative as the BSE & NSE combined advance decline ratio was 1278 : 3028. The capitalisation of the breadth was negative as the commensurate figures were Rs 4441 Crs : Rs 8345 Crs. The NSE shed Rs 9831 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 5100 / 4950 held as the Nifty largely kept within these levels, thereby validating our intraday levels.
The coming session is likely to witness resistance at the 5125 levels on advances above which the 5170 maybe seen. Support is likely at the 5000 levels, below which the 4960 maybe seen. The bullish pivot for the session is likely at the 5080 levels above which the Nifty must stay throughout the session. The bearish pivot is at the 5050 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 small bodied bullish inverted hammer as the bulls failed to support markets at higher levels. The rising volumes imbibe mild hope, provided follow up support is seen in the coming session/s. For the bulls to overcome the weakness, it is important that the Nifty stays above the 5080 levels intraday with higher volumes and open interest expansion. The Nifty sustaining below the 5050 levels may trigger a fresh bout of declines.
The market internals indicate a higher turnover due to the buying momentum. The number of trades were higher and the average ticket size per trade was higher, which indicates retail buying. The capitalisation of the market was lower in divergence with an uptick session. The put call ratios indicate the bears adding shorts on advances.
The outlook for the markets on Thursday is that of cautious optimism as the bulls will have to keep the Nifty above the 5080 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.