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Nifty has near support at 5,950

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Rex Cano Mumbai
Last Updated : Jun 01 2013 | 10:14 PM IST
A sharp fall on Friday reversed the positives early in the week. The Sensex, which gained 550 points during the week, eventually ended the week at 19,760, a marginal 55-point gain.

Among the Sensex 30 stocks, Tata Motors rallied nine per cent to Rs 313, while Sun Pharma rose eight per cent to Rs 1,045. Hero MotoCorp, Coal India and BHEL were the other major gainers. Cipla tumbled nine per cent to Rs 370, while Tata Steel fell seven per cent to Rs 292. State Bank of India, Gail India, Hindalco, ICICI Bank and Larsen & Toubro were the other major losers.

A look at the monthly Fibonacci charts indicates the Sensex might move in a broad range of 18,835-20,070 in June. In the interim, the major support for the BSE index is 19,070-18,950, while resistance could be seen at 19,830-19,950.

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According to the quarterly Fibonacci charts, the Sensex, currently trading with a positive bias, has a crucial support at 19,460. As long as the BSE index sustains above 19,460, one can expect some upward momentum or consolidation in the markets. However, failure to sustain above 19,460 would trigger a sharp fall in the coming weeks. Next week, the Sensex is likely to seek support at 19,540-19,400, while it may face resistance at 19,980-20,115. The National Stock Nifty moved in a range of 158 points. After touching a low of 5,975, the index surged to a high of 6,133, only to fall again. It ended the week at 5,986, a rise of two points.

According to the price and moving averages action on the weekly charts, the bias continues to remain bullish for the Nifty. The weekly trend is likely to remain upwards, as long as the index sustains above 5,880.However, one of the key momentum oscillators, the Stochastic Slow, is showing signs of tiredness. A negative close in the following week could confirm the trend reversal.

According to the daily charts, the Nifty, after bouncing back above its short-term moving average, finally ended the week below the 20-daily moving average. The daily charts indicate some support for the Nifty at 5,930-5,950. However, key momentum oscillators such as the moving average convergence-divergence and the average directional index are in favour of the bears on the daily charts. A close below 5,950 could trigger a fall to 5,865-odd levels or to 5,775. On the upside, the Nifty is likely to face resistance at about 6,050. However, in case the index doesn't break below 5,950 and move past 6,050, we could see a rally all the way to 6,200.To sum up, the Nifty has near-support at 5,950-5,930. As long as the support holds, we could see some bounce-back or consolidation. For the Sensex, the key level to watch out for is 19,460.

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First Published: Jun 01 2013 | 9:07 PM IST

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