The indices have closed in the lower end of the intraday range as the bulls were unable to offer follow up support at higher levels during session. The intraday range specified for the Nifty between the 5625 / 5500 held as the Nifty trended within these levels, thereby validating our intraday levels. The coming session is likely to witness resistance at the 5575 levels on advances above which the 5615 maybe tested. Support is likely at the 5500 levels. The bullish pivot for the session is likely at the 5560 levels above which the Nifty must stay throughout the session. The bearish pivot is at the 5550 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 bearish inverse hammer that opened with a gap down but was later filled. This indicates the bulls showing a feeble presence at lower levels. That the volumes fell on this decline is a sign of marginal optimism. The downward sloping trendline needs watching as a resistance for the bulls in the coming days. The Nifty (spot) must stay above the 5560 levels sustainably with volumes and open interest expansion to rally intraday on Friday. On the flip side, sustaining below the 5550 levels may trigger a fresh bout of declines. Being a weekend session, there is a likelihood of initial strength being followed by mild late profit taking.
The market internals indicate a lower turnover due to the bearishness. The number of trades were lower and the average ticket size per trade was higher, which indicates poor retail buying. 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.
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