Nifty likely to witness range of 5165-5000: Bhambwani

Technical Analyst, Vijay Bhambwani:

The markets opened on an optimistic note and ended the session with losses as the bulls failed to keep the Nifty above the 5165 bullish pivot throughout the session. The benchmark indices ended with approx 1.25 % losses at close. The traded volumes were higher than the previous session which is a negative indicator for a bearish weekend session. The market breadth was negative as the BSE & NSE combined advance decline ratio was 1834 : 2439. The capitalisation of the breadth was negative as the commensurate figures were Rs 3441 Crs : Rs 10493 Crs. The NSE shed Rs 46767 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 5225 / 5050 held as the Nifty kept within these levels, thereby validating our intraday levels.

The coming session is likely to witness resistance at the 5165 levels on advances. Support is likely at the 5000 levels. The bullish pivot for the session is likely at the 5145 levels above which the Nifty must stay throughout the session. The bearish pivot is at the 5100 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 bearish engulfing "daki" candle, co-incidently corresponding with an outside day on the western bar charts. The bearishness was a combination of a long weekend and interest rate hike fears. For the bulls to overcome the weakness, it is important that the Nifty stays above the 5200 levels in the coming few sessions. For intraday players, as long as the bulls keep the Nifty above the 5145 threshold with higher volumes and open interest expansion, there is a possibility of an upthrust. The Nifty sustaining below the 5100 levels may trigger a fresh bout of declines.

The market internals indicate a higher turnover due to the selling conviction. The number of trades were higher and the average ticket size per trade was higher, which indicates retail selling. The capitalisation of the market was lower in line with a bearish session. The put call ratios indicate the bears squaring up their shorts on declines.

The outlook for the markets on Monday is that of guarded optimism as the bulls will have to keep the Nifty above the 5140 levels sustain ably. That seems like a challenging task in view of the overhead supply present in the markets.

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.