The markets ended lower for the fourth straight week as global worries resurfaced. The Sensex recorded a high of 16,390 early in the week, and thereafter dropped to a low of 15,810. The BSE benchmark index finally ended the week with a loss of 140 points at 16,153.
Among the index stocks, Tata Motors plunged nearly 13 per cent to Rs 260, and Bharat Heavy Electricals Ltd (Bhel) tumbled nearly nine per cent to Rs 201. Maruti Suzuki India, Hindalco Industries, Coal India, Bharti Airtel and Tata Steel were the other major losers. On the other hand, Sterlite Industries India surged over six per cent to Rs 101, and State Bank of India (SBI) rallied nearly five per cent to Rs 1,942. Infosys, Jindal Steel, ITC, Sun Pharma and Larsen and Toubro were the other prominent gainers.
As per the monthly Fibonacci charts, the Sensex continues to remain in sell mode and will continue to do so as long as the index remains below 16,915. In fact, the index has now also given a sell signal on the quarterly Fibonacci charts, making the current move just a likely relief rally. The Sensex is likely to face considerable resistance above the 16,700-level in the current up move. On the downside, the index is likely to make fresh lows, and may test 15,440-odd levels in the medium-term.
The NSE Nifty moved in a range of 168 points, the index from a high of 4,957 dipped to a low of 4,789, and finally ended with a loss of 37 points at 4,891.
Select momentum indicators like the MACD (Moving Average Convergence/Diver-gence) and the Stochastic Slow have turned favourable on the daily charts. Hence, it is likely that the index may witness a relief rally in the near term.
However, the up move is likely to face strong resistance around 5,030-odd levels. On the downside, Friday’s low of 4,789 is crucial in the near term.
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The overall bias continues to remain bearish as the short-term (20-day) moving average has now dropped below the long-term (200-day) moving average. For the time being, the Nifty seems to be taking support around the long-term weekly moving average (WMA), which is at 4,819.
Since late August, the Nifty has shown tendency to bounce back after dipping below the long-term WMA. However, currently the momentum oscillators are in favour of the bears hence any rallies are likely to be short-lived. Next week, the Nifty is likely to seek support around 4,825-4,790, while face resistance around 4,955-4,995.