Nifty: Resistance around 5,350 likely
The Sensex ended the week with a gain of 279 points as the markets cheered a surprise 50-basis points repo rate cut by the Reserve Bank of India. The Sensex ended higher for the first four trading days, wherein the index touched a high of 17,530. However, partial profit taking on Friday saw the index settle at 17,374 for the week.
Among the index stocks - Tata Motors rallied nearly 10 per cent to Rs 317. Coal India and Hero MotoCorp surged around seven and six per cent, respectively. Maruti Suzuki, Mahindra & Mahindra, Tata Steel, Bajaj Auto, HDFC Bank and ITC were the other major gainers. On the other hand, BHEL plunged nearly five per cent to Rs 246. Reliance Industries, down around 2.5 per cent at Rs 731, was the other prominent loser.
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As per the monthly Fibonacci charts, the Sensex needs to break above 17,650 for a sustained upmove. In case the index is unable to break above 17,650, and it starts to trade consistently below 17,400, then the index could test sub-17,000 levels during the course of the week.
Next week, the Sensex is likely to face resistance around 17,570 and 17,700, while on the downside the index is likely to seek support around 17,175 and 17,050.
The NSE Nifty moved in a range of 160-odd points, the index touched a high of 5,342 and a low 5,184 and ended the week with a gain of 83 points at 5,291.
The weekly charts indicate that the Nifty has been consistently taking support around its medium-term (50-weeks moving average), which is currently at 5,190. Below this the next near support lies at 5,140, which also coincides with the long-term (200-day daily moving average).
Hence, as long as Nifty maintains above 5,140 the bias is likely to remain positive. However, select momentum oscillators, mainly on the weekly charts, could give a sell signal in case the Nifty ends with a weekly loss. Next week, the index is likely to face resistance around 5,350 and 5,390, while it may seek support around 5,230 and 5,190.