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 the session. The intraday range specified for the Nifty between the 5435 / 5340 held as the Nifty trended largely within these levels, thereby validating our intraday levels. The coming session is likely to witness resistance at the 5375 levels on advances. Support is likely at the 5260 levels below which the 5210 maybe seen. 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 5360 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 bearish engulfing "daki" candle, which indicates the return of the bears after a brief intraday abortive upthrust. The anticipated upmove did occur but the slide below the 5390 bearish pivot of the day set the tone unmistakably downwards. The downward sloping trendline is now an unimpeachable resistance for the bulls to overcome. The Nifty (spot) must stay above the 5400 levels sustainably with volumes and open interest expansion to rally intraday on Friday. On the flip side, sustaining below the 5360 levels may trigger a fresh bout of declines. Being a weekend session, the buying conviction will be wanting.
The market internals indicate a higher turnover due to the selling. The number of trades were higher and the average ticket size per trade was lower, which indicates retail selling pressure. 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 Indian markets to open with substantial weakness post the carnage in global equity markets. Traders should be ready for wild fluctuations during the day wherein the first support in the NSE Nifty comes at 5,166. If market is unable to sustain above this level, we may see benchmark tripping towards the lower support at 5,122,``
However, after the morning panic, there can be some stability if Nifty is able to sustain above critical level 5,225. Above this, some bargain hunting might take the index towards the resistance at 5,278. Above this, we may see some relief rally for some time wherein Nifty may move above 5,300 level.
``Wall Street plunged on Thursday recording its single worst day drop since 2008 as fear about the global economy spooked investors. Stock markets in the Asia-Pacific region are trading with sharp cuts on Friday morning
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