The markets opened on a nervous note and ended the session with continued losses as the bulls failed to keep the Nifty above the 5425 bullish pivot throughout the session. The weekend factor also kept the buying momentum under check. The benchmark indices ended with approx 0.6 % losses at close. The traded volumes were lower as compared to the previous session, which is a routine indicator for a downtick weekend session. The market breadth was negative as the BSE & NSE combined advance decline ratio was 1328 : 3030. The capitalisation of the breadth was negative as the commensurate figures were Rs 3763 Crs : Rs 8514 Crs. The NSE shed Rs 40396 Crs in market capitalisation.
The indices have closed in the lower end of the intraday range as the bulls were unable to offer support at higher levels throughout the session. The intraday range specified for the Nifty between the 5440 / 5350 held as the Nifty took support at the 5355 levels, thereby validating our intraday levels.
The coming session is likely to witness resistance at the 5410 levels on advances above which the 5435 maybe seen. Support is likely at the 5325 levels below which the 5300 level maybe tested. The bullish pivot for the session is likely at the 5400 levels above which the Nifty must stay throughout the session. The bearish pivot is at the 5375 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, indicating a lack of buying conviction. After three days of consecutive selling, there maybe a mild pullback. The downward sloping trendline remains the nemesis of the bulls and as long as rallies occur below this trendline, they are corrective pullbacks alone. The Nifty (spot) must stay above the 5400 levels sustainably with volumes and open interest expansion to rally intraday on Monday. On the flip side, sustaining below the 5375 levels may trigger a fresh bout of declines.
The market internals indicate a lower turnover due to the lack of buying conviction. The number of trades were lower and the average ticket size per trade was lower, which indicates a poor buying bias. 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 today is that of cautious optimism as the bulls will have to keep the Nifty above the 5400 levels sustain ably to trigger a fresh upmove. After three days of consecutive selling, there maybe a mild pullback.
