Upside seems limited
The markets began the week on a robust note, and thereafter consolidated at higher levels with stock-specific action taking centre-stage. The Sensex rallied to a high of 17,292, and finally ended the week with a gain of 359 points at 17,198.
Among the Sensex stocks, NTPC soared nearly nine per cent to Rs 166. Bharat Heavy Electricals Ltd and Cipla surged over seven per cent each.
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Larsen and Toubro, Sun Pharma, Wipro, Tata Motors and Housing Development Finance Corp were the other major gainers. On the other hand, Bharti Airtel, Hero MotoCorp and Coal India declined two-three per cent each.
As per the monthly Fibonacci chart, the Sensex has not given any clear indication as of now. The key supports for the index this month are 16,840, 16,720 and 16,600. Whereas, the monthly resistance levels for the BSE benchmark index are 17,630, 17,750 and 17,875.
As per the quarterly charts, the Sensex after testing a low of 16,598 (as against support at 16,500) has now moved back above the 17,050-odd hurdle. This means that the index could now move to its next hurdle at 17,430. The 17,020-17,050 area is the key support area in the near term. Sustained trade below this support area could weaken the markets.
Next week, the Sensex is likely to seek support around 17,055-16,965, while face resistance around 17,340-17,430.
The NSE Nifty moved in a range of 117 points. After a gap-up opening at 5,130, the index surged to a high of 5,246, and finally settled with a gain of 116 points at 5,216.
The Nifty has managed to sustain above its short-term (20-day DMA) for the last four trading days, and has also given a close above 20-WMA, which is a positive sign.
However, the momentum oscillators, mainly the Stochastic Slow, is in bearish mode on the weekly charts.
The momentum oscillators at times are the lead indicators, hence it looks likely that the upside may be limited from the current levels. The Nifty is likely to face considerable resistance in the 5,260-5,280 range. On the downside, the index could seek support around 5,100-odd levels.