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Mumbai: In the week under review, the markets exhibited nervousness and remained on tenterhooks throughout the week in the backdrop of rising India-China border dispute. Global cues too played its part, while the markets continued to snub the sharp spike in Covid-19 cases across India.
The BSE benchmark index, the Sensex, began trading for the week with a bang, as it opened 220-odd points higher on Monday. Volatility creeped in soon after and the BSE index tanked to low of 38,573. Thereafter, the BSE index managed to recoup its losses in a laboured manner amid intermediate bouts of selling pressure. The BSE index touched a high of 39,360, up over 500 points for the week. However, a late bout of selling pressure saw the BSE index once again wipe out all its gains. The Sensex eventually ended the week on a flat note at 38,846 – down mere nine points.
Among the Sensex 30 stocks, IT and auto stocks out-performed this week, while banking and FMCG shares under-performed. HCL Technologies zoomed over 12 per cent. Mahindra & Mahindra, Infosys, Bajaj Auto, Hero MotoCorp, Sun Pharma and TCS rallied 3-7 per cent each. On the other hand, SBI plunged 5 per cent. Kotak Mahindra Bank, Maruti Suzuki, Tata Steel, Hindustan Unilever, HDFC, ITC, HDFC Bank, Bajaj Finance and Larsen & Toubro declined 2-4 per cent each.
Also Read: Market Outlook: Nifty may weaken on sustained trade below its 20-DMA
Going ahead, the border related news update is likely to keep the markets on its toes. The BSE index has given a mixed signal on the monthly Fibonacci chart. The Sensex at first had given a minor sell signal and then rebounded into the positive zone and gave a minor buy signal.
As per the monthly chart, the 38,630-level is likely to be a key pivot point for the Sensex. As long as the BSE index sustains above 38,630, the index may re-attempt to test its recent high or rally further higher to 39,800-40,550 level. On the flip side, in case the BSE index trades consistently below 38,630, the Sensex can re-test its recent low around 37,950-level. Break of 37,950, can trigger a fall towards 37,450-36,700.
As per the weekly Fibonacci chart, next week, in case of an up move the BSE index may face resistance around 39,150-39,240-39,330. In case of a decline the Sensex is likely to seek support around 38,550-38,450-38,360.
This week, the NSE Nifty swung in a relatively narrow range of 230-odd points. The NSE index touched a low of 11,384 and then surged to a high of 11,618. The Nifty finally ended with a marginal gain of 0.3 per cent at 11,505.
The NSE Nifty managed to sustain above its near term support at 20-DMA (Daily Moving Average) throughout the week on a closing basis, which is a positive sign. As long as the NSE index sustains above its 20-DMA, the index can rally towards the higher end of the Bollinger Band at 11,650-level, which is likely to be a key hurdle for the index. On the downside, the Nifty may decline towards 11,250.
The key momentum oscillators on the weekly charts are giving mixed indications. The DI (Directional Index) and the MACD (Moving Average Convergence Divergence) are clearly in favour of the bulls. The RSI (Relative Strength Index) is in the neutral zone. However, the Slow Stochastic is in favour of the bears.
Disclaimer: The views expressed in this article are personal and for information purpose only, it does not advocate any buy or sell /recommendation.
