Nifty likely to witness range of 3730-3900

Technical Analyst, Vijay Bhambwani:

The markets opened with a spring in it's step and ended with almost a percent lower after bear covering on declines rescued the indices from deep cuts. The traded volumes were higher than the previous session as the buying at lower levels was on higher volumes. The market breadth was negative as the BSE & NSE combined figures were 1102 : 2715. The capitalisation of the breadth was also negative as the commensurate figures were Rs 4595 Crs : Rs 11664 Crs. The attrition was again led by the banking sector and followed by the midcap stocks. The f&o statistics for the session indicated a higher turnover as the volatility attracted increased participation.

The indices have closed at the lower end of the intraday band, that too with negative market internals. The higher volumes indicate a tentative undertone. The 3700 / 3960 range specified for Wednesday held as the Nifty traded within these parameters.

The coming session is likely to witness a range of on 3730 declines and 3900 in case of advances. The bullish pivot for the session will be the 3870 above which the outlook will be positive and 3840 below which the bears will continue to remain in charge of the near term sentiments.

The market internals indicate a higher turnover as the participation levels rose due to the volatility. The number of trades increased and the average ticket size was lower, indicating a higher selling bias. The capitalisation of the market was lower in line with a downtick session.

The outlook for the markets today is that of continued caution as the US economic data will have a profound bearing on the near term outlook. Curtail exposure in the market as of now.

Disclosure: The analyst has no exposure to any scrip/s recommended above.