The markets opened on an optimistic note and ended the session with significant losses as the bulls failed to hold the Nifty above the 6240 pivot levels throughout the session. This was in line with our expectation since weekend factors were expected to curb buying enthusiasm. The benchmark indices ended with approx 1.80 % losses over the previous session. The traded volumes were lower compared to the previous session, which is a routine indicator for a bearish weekend session.
The indices have closed in the lower end of the intraday range as the bulls were unable to support the markets at higher levels. The intraday range advocated for the Nifty between the 6250 / 6075 was violated as the Niftytested the 6050 levels - thereby exceeding our intraday wave count employed on the downside.
The coming session is likely to witness a range of 6150 on advances. Support is likely at the 5950. The wide range is due to the high base effect of Fridays range. The bullish pivot for the session is likely at the 6135 levels and the bearish pivot at the 6100 levels. Traders must watch these levels for signs of trend determination in the coming session.
The daily candle chart of the Nifty shows a big bearish candle with a small lower wick, indicating bearishness in the absolute near term. The 6284 (previous significant high) will become a hurdle in the near term which must be overcome forcefully if a rally is to commence. For the bulls to regain their initiative intraday, the 6135 must be overcome conclusively in the coming session. The net bias - caution for Monday as long as the Niftytrades below the 6100 (today's bearish pivot).
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, indicating a retail selling. The capitalisation of the market was lower in line with a downtick session. The f&o cues show the bears squaring up shorts on declines.
The outlook for the markets today is that of caution as the bulls must hold the Nifty above the 6135 levels sustain ably to manage an upmove.
