Mumbai: The markets exhibited a high amount of volatility throughout the week on the back of mixed global cues and overhang of India-China border dispute. The negative news flow turned out to be a perfect bear trap, as traders were caught on the wrong foot during the weekly index futures & options expiry. Short covering coupled with renewed buying in index heavyweight Reliance Industries helped the markets end the week on a robust note.
The BSE benchmark index, the Sensex, had slipped to a low of 32,924 – down around 860-odd points from the previous week’s close. The rebound was equally ferocious, as the BSE index soared to a high of 34,848 – an intra-week gain of 1,925 points. The Sensex eventually ended the week with a smart gain of 2.8 per cent (951 points) at 34,732.
Among the Sensex 30 stocks, Reliance Industries was the top gainer this week, the stock zoomed nearly 11 per cent after the company announced that it was now debt-free. Bajaj Finance also soared 10 per cent. ICICI Bank, HDFC Bank, PowerGrid and SBI were the other major gainers – up 3-5 per cent each. On the flip side, IndusInd Bank tumbled over 8 per cent. ITC, NTPC, Bajaj Auto, Larsen & Toubro, Hero MotoCorp and Mahindra & Mahindra were the other major losers, down 2-5 per cent each.
Also Read: Market Outlook: Time to be cautiously optimistic as Nifty re-tests 100-DMA
As anticipated market volatility has increased over the last week. One needs to be cautiously optimistic, as the BSE index nears the indicative upper end of the trading band. The recent high of the Sensex was 34,928, above which the next target could be quarterly Fibonacci (R1) at 35,800 followed by the yearly (S3) at 37,200. For the current uptrend to continue, the key support now will be at 34,200 followed by 33,500. Break and close below 33,500 could derail the rally and possibly trigger a slide towards fresh lows for the month.
As per the weekly Fibonacci charts, next week, in case of an up move, the BSE Sensex may face resistance around 35,100-35,330-35,560, and in case of a down move the BSE index is likely to seek support around 33,630-33,410-33,180.
The NSE Nifty ended with a smart gain of 2.7 per cent at 10,244 – its highest weekly close since March 02. The NSE index has firmly closed above the 20-WMA (Weekly Moving Average) at 9,935, which is now likely to act as a strong support. The near term bias is likely to remain bullish as long as the Nifty remains above 9,930. On the upside, the Nifty will now aim for its 50-WMA which is around 10,950-odd levels in the coming weeks.
Among the key momentum oscillators on the weekly charts, the Slow Stochastic and the MACD (Moving Average Convergence Divergence) continue to remain firmly in favour of the bulls. The RSI (Relative Strength Index) remains in neutral mode, while the DI (Directional Index) remains mildly negative.
Disclaimer: The views expressed in this article are personal and for information purpose only, it does not advocate any buy or sell /recommendation.
