Wkly Tech Analysis: Bias to remain positive
Amid economic and political developments, markets recorded choppy movement this week. The outcome of the elections in Greece and the Reserve Bank of India’s policy review on Monday are likely to decide market trends next week.
This week, the Bombay Stock Exchange (BSE) Sensex moved in a relatively lower range of 400-odd points. From a low of 16,553, the index rallied to a high of 16,968, before settling at 16,950, a gain of 231 points.
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Among the Sensex 30 stocks, Hindustan Unilever surged over five per cent to Rs 450, while Infosys and Coal India rallied over four per cent each. ITC, TCS, Bharti Airtel, Hindalco and ONGC were the other major gainers. On the other hand, NTPC and Dr. Reddy’s shed three per cent each at Rs 151 and Rs 1,575, respectively. Maruti Suzuki, HDFC, Wipro and BHEL were the other major losers.
According to the monthly Fibonacci charts, the Sensex crossed its R1-level (first monthly resistance) of 16,840. Going ahead, the bias is likely to remain positive, as long as the index sustains above 16,840, with the next significant support at around 16,575.
On the upside, the index would now look to test R2 and R3. The monthly R2 is placed at 17,030, while the R3 is at 17,225. In case the Sensex surges past 17,225, the rise would gain momentum and the BSE benchmark index may test 17,400, above which the next major resistance is at around 18,100.
The National Stock Exchange Nifty touched a low of 5,015, and a high of 5,146 during the week. The index finally ended at 5,139, a gain of 71 points.
After taking support at around the 200-WMA (weekly moving average), the Nifty has now bounced back above its 50-WMA of 5,114. The short-term WMA (20-WMA) continues to remain above the long-term and the medium weekly moving averages, a positive sign for the medium term.
The moving averages indicate a near target for the Nifty at around 5,210, above which the Nifty could spurt to 5,280-odd levels. Weekly momentum oscillators indicated mixed signals. This means the index may face resistance at higher levels. The monthly charts indicate strong resistance for the Nifty at around 5,350.
Next week, the Nifty is likely to face resistance at around 5,190 and 5,220, while seeking support at around 5,090-5,055.