Market Outlook: Fresh gains for Sensex only above 39,300-level

@rex_cano

Mumbai: Despite displaying strength for the major part of the trading session, the markets ended on a subdued note as the key benchmark indices failed to sustain at higher levels. Technology shares outperformed the markets today, while the financial shares came under selling pressure a day ahead of its deadline to submit a possible one-time loan recast plan to the RBI and the finance ministry.

The BSE benchmark index, the Sensex, opened with a positive gap of 220-odd points at 39,074, and soon jumped to a high of 39,230. The BSE index thereafter displayed a firm trend until mid-noon deals. A sudden bout of selling in the late noon deals saw the BSE index wipe out gains and nose-dive to a low of 38,573 – down over 650 points from the day’s high. The recovery was equally swift. However, the Sensex eventually ended the day with a loss of 98 points at 38,757.

Among the Sensex 30 stocks, HCL Technologies zoomed over 10 per cent. TCS, Infosys and Tech Mahindra soared 3-5 per cent each. Titan, Bajaj Auto and NTPC were the other notable gainers. On the other hand, Bharti Airtel and Bajaj Finance shed around 3 per cent each. PowerGrid Corporation, SBI, HDFC Bank, Sun Pharma Kotak Mahindra Bank, ICICI Bank, HDFC, Hindustan Unilever, Larsen & Toubro, Nestle India, Axis Bank and Maruti Suzuki were the other major losers.

Also Read: Weekly Outlook: Upside may be limited; 39,300 likely to be key hurdle for the Sensex

The Sensex as anticipated faced resistance near about its key hurdle mentioned in the weekly outlook at 39,300-odd level. Going ahead, the bias for the BSE index is likely to remain that of capped upside, unless and until the BSE index clears the 39,300 hurdle. Also, as explained earlier, since the BSE index has given a minor sell signal on the monthly Fibonacci chart, there is a possibility for the BSE index to retest its recent lows or drift lower towards 37,450-level.

As per the daily Fibonacci charts, on Tuesday, in case of an up move the BSE Sensex is likely to face resistance around 39,000-39,085-39,160. Whereas, in case of a decline the Sensex may seek support around l38,500-38,430-38,350.

The NSE Nifty swung in a wide range of 180-odd points. The NSE index from a high of 11,569, tumbled to a low of 11,384 in intra-day trades, and finally ended with a minor loss of 24 points at 11,440. While on one hand the Nifty failed to sustain at higher levels, on the other hand the Nifty managed to sustain above it’s near term support – the 20-DMA (Daily Moving Average).

Going forward, the NSE index needs to sustain continuously above its 20-DMA for hopes of a pull-back. At the same time, the upside for the Nifty may be limited to 11,650. On the other hand, sustained trade below the 20-DMA can push the index towards its 50-DMA at 11,200-odd level.

Among the key momentum oscillators on the daily charts, the DI (Directional Index) and the Slow Stochastic are in favour of the bulls. The MACD (Moving Average Convergence Divergence) is inconclusive and the 14-day RSI (Relative Strength Index) is in the neutral zone.

Disclaimer: The views expressed in this article are personal and for information purpose only, it does not advocate any buy or sell /recommendation.