Sensex key support at 13,700

WEEKLY TECHNICAL ANALYSIS

The Sensex began on a firm note last week, consolidated mid-week before ending the week with a bang at 13,897 - up 513 points. The index moved in a range of 492 points between a low of 13,424 and high of 13,916.

For the third week in a row, the Sensex ended close to the week's high thus showing larger commitment from the bulls. The index has now gained 1,041 points in the last two weeks.

Last week, we had mentioned that the Sensex is close to our target of 13,800, and could face stiff resistance. While the index paused around that mark on the first four trading days, aggressive buying in heavyweights on Friday saw the index face the resistance with ease.

The index has now not only turned positive on a year-till-date basis, but also opened up the possibility of new highs. With the bias turning positive, the next target for the Sensex would be 13,990-14,275-14,565. This week, the 13,700-level would be the key support for the Sensex below which it could drift to 13,480. On the upside, the index may face resistance around 14,085-14,140-14,200.

Similarly, the Nifty soared to a high of 4,090 before settling with a gain of 166 points at 4,084. The index has gained 332 points in the last two weeks.

If the Nifty sustains above the 4,085-level, it may retest its all-time high of 4,245. On a weekly basis, the index may face resistance around 4,150-4,170-4,190, while in case of a downmove, the index is likely to find support around 4,020-4,000-3,980.

Other than technicals, there are three major events that could change the course of the markets on its own - viz the Annual Credit Policy Statement, Reliance results and derivatives expiry.

Get set for a profitable week....