Markets recorded significant gains in the week ended Friday on hope the Reserve Bank of India (RBI) would cut rates in the coming policy review on June 18. From an early week low of 15,749, the Sensex rallied to a high of 16,768, before ending at 16,719, a significant gain of 4.7 per cent. In the process, it also reversed its three-week losing streak.

Going ahead, markets are likely to remain fairly volatile, owing to global uncertainties and the coming RBI policy review.

All the 30 stocks in the Sensex ended the week with gains. Larsen & Toubro was the major gainer, up about 15 per cent at Rs 1,309. Sterlite, Hero MotoCorp, HDFC Bank, NTPC, DLF, SBI and BHEL were the other major gainers, with gains of seven-10 per cent.

According to the monthly Fibonacci charts, the Sensex seems headed towards its monthly resistance levels of 16,840 and 16,725. The monthly bias is likely to remain positive, as long as the index remains above 16,218. The quarterly Fibonacci charts also reaffirm the fact that the bias may remain positive, as long as the index remains above 16,200. Failure on this front could result in fresh weakness, with a downside target of 15,450.

Next week, the Sensex may face resistance at 17,100-17,350, while it may seek support at 16,330-16,090.

The National Stock Exchange Nifty moved in a range of 314 points. From a low of 4,770, it surged to a high of 5,084, before settling at 5,068, a gain of 4.7 per cent. It managed to take support around its long-term (200-WMA), before bouncing back strongly. The overall trend appears to be neutral in the short term, and bullish in the medium term.

At the same time, the daily momentum oscillators are in favour of the bulls. According to the daily charts, the bias is likely to remain positive, as long as the Nifty sustains above the 5,000 mark. The move upwards would gain fresh momentum once the index stabilises at above 5,090.

However, on the flip side, the monthly momentum oscillators look a wee bit tired, making the current move upward susceptible in the medium term. The monthly charts indicate considerable resistance for the Nifty at around 5,110 and 5,230.