Mumbai: After a strong rally in the last week of April, the markets have started the month of May on a whimper giving away almost all its gains on a week-on-week basis. In the last week of April, the BSE Sensex had rallied 7.6 per cent, however, this week the BSE index shed as much as 6.2 per cent.
The BSE benchmark index started the week on a dismal note, and thereafter languished around the lower levels for the remainder of the week. The index touched a low of 31,159, and finally ended the week at 31,643.
Among the Sensex 30 stocks, Axis Bank was the major loser, down 14 per cent at Rs. 382 on reports that the government plans to sell its stake in the bank and ITC. The latter also tumbled over 13 per cent. Maruti, Bajaj Finance, SBI, HDFC, ICICI Bank, Asian Paints and Kotak Bank were the other major losers – down over 10 per cent each.
On the positive front, Reliance Industries surged over 6.5 per cent to Rs. 1,561 on attracting a slew of investments for its Jio platform. Mahindra & Mahindra rallied 5 per cent and Bharti Airtel jumped 3 per cent. Sun Pharma was the only other gainer among the Sensex stocks.
Going ahead, the bias for this month is likely to remain bearish as long as the Sensex sustains below 32,750-odd level. The BSE index has not only started the month on a bearish note, but has also given a minor sell indication as per the monthly Fibonacci chart. The index has broken the S1 support at 31,280-odd level this week. Thus, the index may now look to test the monthly S2 or S3 level at 30,525 and 29,770, respectively, during the course of the month.
As per the weekly Fibonacci charts, the BSE Sensex may seek support around 31,035-30,850-30,660, and on the upside the index may face resistance around 32,250-32,435-32,625.
The NSE Nifty ended the week at 9,252, and has made a lower low and lower high on the weekly charts for the first time in five trading weeks. This could be one of the first sign of tiredness. However, the daily charts are showing some ray of hope, as the index has consistently defended the support around the 20-DMA (Daily Moving Average).
The short-term bias for the Nifty is likely to remain cautiously optimistic as long as the index holds above its 20-DMA (9,210) and the trend line support around 8,980-odd level. Having said that, the upside too looks limited, with near resistance around the 50-DMA (9,550). To conclude, it seems like the Nifty may trade in a broad range of 9,000-9,500, amid alternative bouts of volatility on either side.
The key select weekly momentum oscillators on the weekly charts are also indicating a possibility of sideways movement. The Directional Index and the RSI (Relative Strength Index) are in neutral mode. The Slow Stochastic is marginally positive, while the MACD (Moving Average Convergence Divergence) is in favour of the bears.
Disclaimer: The article is for information purpose only and does advocate any buy or sell recommendation.
