Index may drift to 11,800

WEEKLY TECHNICAL ANALYSIS

The Sensex continued to exhibit high volatility for yet another week. The index began the week on a negative note, mirroring the meltdown in market indices across the globe, and the Sensex tumbled to a low of 12,344 (S3 mentioned last week was 12,315) on Monday.

The index, however, in the process gave two major negative signals. One, the break of its previous low of 12,800, and, two, the break of 12,635, a crucial support.

Following which, the index is now likely to drift to lower levels of 11,800 in the coming days. In case, if the index fails to hold 11,800, then the index may drop to 10,500.

On the upside, the index will now have to cross the 13,800-mark to arrest the current downtrend. On the other hand, a sustained stay below the 12,635-mark could trigger accelerated downmove.

Coming back to last week's performance, the Sensex after touching a low of 12,344, bounced back smartly to touch a high of 13,145 "" an intra-week pullback of 802 points. The Sensex ended the week almost unchanged at 12,885 "" down one point.

Similarly, the Nifty tumbled to a low of 3555, and then rallied sharply to a high of 3796 "" a swing of 241 points "" before settling with a loss of nine points at 3718 for the week ended March 9. This week, the Sensex is likely to face resistance around 13,175-13,260-13,350, and may find support around 12,595-12,505-12,415.

On the other hand, weekly support levels for the Nifty are placed at 3625-3600-3570, while the index may face resistance around 3810-3840-3870.