Mumbai: The benchmark indices, the Sensex and the Nifty, reversed a two-week winning streak with losses of around a per cent each. There was a tug-of-war between the bulls and the bears as the greed and fear factor played out among the markets participants.
The Sensex and the Nifty stated the week on a disappointing note, and were down around 4% respectively by mid-week, a smart recovery thereafter on hopes of likely economic stimulus package helped indices recoup most of their losses. The Sensex and Nifty however ended around a per cent lower for the week despite the pull-back at 31,327 and 9,154, respectively.
In doing so at this week’s high of 9,390, the NSE Nifty staged a 38.2% recovery of the recent fall in just five weeks. It may be recalled that in the preceding 10 weeks the Nifty had tumbled by as much as 40% from it’s life-time high of 12,431 to a low of 7,511.
This places Nifty at a crucial juncture going ahead. The level of 9,390 needs to be carefully watched, as it may act as an intermediate resistance, failure to overcome the same may see the Nifty drift lower towards 8,670-8,450-8,230 odd levels, which basically are the 38.2%, 50% and 61.8% retracement levels of the recent rally. On the positive front, if the Nifty is able to break and sustain above 9,390, the index may extend it’s gain towards 9,970 and 10,550, which are the 50% and 61.8%, retracement levels of the preceding major fall, respectively.
Among select key weekly momentum oscillators, the Slow Stochastic is showing positive divergence, while the RSI (Relative Strength Index) has hovered side-ways. The MACD (Moving Average Convergence Divergence), albeit oversold, and the Directional Index remain in favour of the bears.
As per the weekly Fibonacci charts, the BSE Sensex next week may seek support around 30,685-30,490-30,290, and on the upside may face resistance around 31,695-32,165-32,365.
Disclaimer: The article is for information purpose only and does not advocate buy or sell recommendations.
