The markets traded with a positive bias in the holiday-shortened week. Positive global news flow, higher advance tax numbers, and finally, a status quo policy from the Reserve Bank of India, helped the markets sign off the week on a winning note.
The markets, although volatile, moved in an extremely thin range. The Bombay Stock Exchange benchmark index, or Sensex, registered both a higher low and a lower high on weekly charts. The Sensex touched a high of 19,897, and a low of 19,321, and finally settled with a gain of 356 points at 19,865.
Among the Sensex 30 stocks, Tata Motors zoomed eight per cent to Rs 1,348, and Tata Steel surged seven per cent to Rs 659. Reliance Infrastructure, Tata Consultancy Services, Sterlite, Infosys, Wipro, Hindalco and Bharti Airtel were the other major gainers — up four-six per cent each. On the other hand, Hero Honda and Mahindra & Mahindra plunged nearly six per cent each to Rs 1,679 and Rs 733, respectively. Jindal Steel, Maruti Suzuki and Bajaj Auto were the other prominent losers.
As we head towards the end of the year 2010, it seems we are headed for interesting times. Two probabilities can be seen from the current levels. According to the monthly fibonacci calculations, the Sensex low for the month at 19,075 seems to be done for now. While the high of 20,218 is likely to be re-tested, we could see the index jump from 20,345-20,600 by the year-end.
However, the weekly chart shows fear for investors, as the index has been taking support around its short-term (20-week) moving average for the last four weeks. If the Sensex closes below 19,470 during the week, we could see heavy bear pressure, with a possibility of the index falling to 18,300-odd levels.
The National Stock Exchange Nifty struggled around its short-term moving average throughout the week, and eventually managed to close higher than it’s short-term (20-day) moving average on two occasions on the daily chart. The Nifty, too, has somehow held on its short-term (20-week) moving average, which is currently at 5,850, a break of the same could spell trouble for the markets.
More From This Section
On the positive front, the Nifty has formed a hammer pattern on both daily and weekly charts, which indicates that the bulls are strengthening. Hence, a possibility of an upside is higher than that of a downward move.
The daily chart also indicates congestion in the 6,030-6,060 range. So, the Nifty will have to break past this range for a clear cut direction. Till then, we may continue to see range-bound movement.