Nifty likely to witness range of 5175-5075: Bhambwani

Technical Analyst, Vijay Bhambwani:

The markets opened with a gap up and ended the session with gains as the bulls managed to keep the Nifty above the 5025 bullish pivot during the session. The benchmark indices ended with approx 1.2 % gains at close. The traded volumes were marginally higher than the previous session which is a positive  indicator for a bullish session. The market breadth was positive as the BSE & NSE combined advance decline ratio was 3058 : 1268. The capitalisation of the breadth was positive as the commensurate figures were Rs 12213 Crs : Rs 3284 Crs. The NSE gained Rs 86763 Crs in market capitalisation.
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. The intraday range specified for the Nifty between the 5150 / 5000 held as the Nifty retraced from the 5154 levels, thereby validating our intraday counts.
The coming session is likely to witness resistance at the 5175 levels on advances. Support is likely at the 5075 levels. The bullish pivot for the session is likely at the 5125 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 a smaller bodied bullish candle with a sizable upper shadow - indicating some selling pressure at higher levels. As the Nifty nears the 5200 levels, we anticipate short term profit taking pressure to accelerate. Staying above the 5125 level with higher volumes and open interest will see the bulls extending their intraday domination over the bears. The Nifty sustaining below the 5100 levels may trigger a fresh bout of declines.
The market internals indicate a mildly higher turnover due to the strength. The number of trades were higher and the average ticket size per trade was lower, which indicates lower retail buying enthusiasm. The capitalisation of the market was higher in line with a bullish session. The put call ratios indicate the bears ramping up their shorts on advances.
The outlook for the markets on Thursday is that of guarded optimism as the bulls will have to keep the Nifty above the 5125 levels sustain ably, which maybe an achievable task. Profit sales may accelerate on upthrusts.
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.