Mumbai: The markets exhibited high amount of volatility in the week under review owing to weak global cues and domestic news flow. The much awaited economic package was announced by the government this week. PM Modi in his address to the nation on May 13 said that the total size of the package would be Rs. 20 lakh crore, including some of the measures announced earlier by the government and the RBI.
Over the course of the weekend, Finance minister Nirmala Sitharaman would be sharing details of the economic package. The measures announced until Friday, had failed to excite the markets, hence the markets after a gung-ho rally on Wednesday morning fizzled out and started drifting lower in sync with the world markets.
The BSE benchmark index, the Sensex, started the week on a jittery note, but the mid-week fillip saw the index soar to a high of 32,845 – up almost 1,200 points when compared to the previous week’s close. However, thereafter the BSE index plunged to a low of 30,770 – a sharp from of 2,075 points from the intra-week high. The Sensex eventually ended the week with a loss of 1.7 per cent (545 points) at 31,098.
Among the Sensex 30 stocks, auto stocks were in limelight this week on hopes of some stimulus measures for the sector. Hero MotoCorp zoomed nearly 12 per cent. Bajaj Auto and Maruti also soared around 10 per cent each. Larsen & Toubro, Bharti Airtel, NTPC, ITC and Bajaj Finance were the other prominent gainers.
As for the laggards, Reliance Industries was the top loser, down nearly 7 per cent on account of profit-taking. IndusInd Bank, ICICI Bank, HDFC Bank, Sun Pharma, Kotak Bank, Infosys and HDFC were the other major losers, down 3-5 per cent each.
Going ahead, the start of the week could very well depend on how the markets react to the measures announced over the weekend. Technically speaking, the Sensex seems to be on a weak ground as per the monthly Fibonacci charts. However, the BSE index is now relative closer to its crucial support as per the monthly Fibonacci S2 and S3 levels at 30,525 and 29,770, respectively.
If the BSE index is able to take support around these levels, we may witness a pull-back thereafter. However, if the index fails to hold on to the above mentioned levels, we could witness further losses during the course of the month. The upside, for the index could be capped around 32,300-odd levels.
As per the weekly Fibonacci charts, the BSE Sensex may seek support around 30,305-30,060-29,815, and on the upside the index may face resistance around 31,890-32,135-32,380.
The NSE Nifty ended with a loss of 1.2 per cent at 9,137, after swinging in a wide range of 9,585 – 9,044. As per the Nifty daily charts, the index is now very close to its trend line support around 8,980 and the lower-end of the Bollinger Band around 8,900. These two levels need to be closely watched for signs of any revival or further breakdown.
As per the weekly charts, the bears seem to be holding some upper hand, as the index has made a lower weekly low for the second straight week. It now all depends on how the markets trade in the early part of the week.
Among the key select weekly momentum oscillators, the MACD (Moving Average Convergence Divergence) and the Directional Index are in favour of the bears. The RSI (Relative Strength Index) seems to be slightly subdued, while the Slow Stochastic indicator is inconclusive.
Disclaimer: The article is for information purpose only and does advocate any buy or sell recommendation.
