After five weeks of losses, the markets, aided by short-covering, logged the best weekly close in over two years. The Sensex started the week with an upside gap of over 200 points, and, thereafter, did not look back. The holiday-shortened week saw the markets log gains in each of the three trading sessions. The BSE benchmark Sensex touched a high of 16,990 and ended finally with a gain of over six per cent (973 points) at 16,821 -- the best weekly gain in percentage terms since July 17, 2009.
Among the index stocks, DLF zoomed 18 per cent to Rs 208. Tata Steel, Jindal Steel, Jaiprakash Associates, Reliance, Hindalco and Sterlite were the other major gainers, up over 10 per cent each. ONGC, however, slipped five per cent to Rs 264.
On the monthly charts, the Sensex has seen net losses in the preceding two months. Also, the charts indicate considerable support at sub-16,000 levels.
According to the monthly charts, in case of weakness, the Sensex is likely to seek support around 16,100, and, deeper down, at 15,650. The far-off support stands around the 15,000-mark, which also coincides with the year-support level. This month we may see net gains, given the overall oversold position. However, the upside may be capped around 17,600-17,900. The yearly charts indicate the bears will continue to have an upper hand, so long as the Sensex stays below 18,400.
This week the index is likely to seek support around 16,470-16,250, and, on the upside, it may face resistance around 17,175-17,400.
The NSE Nifty moved in a range of 308 points. From a low of 4,806, the index rallied to a high of 5,114. It ended finally with a gain of 6.2 per cent (292 points) at 5,040.
The Stochastic Slow and the Moving Average Convergence-Divergence have turned positive on the daily charts. Hence, the Nifty is likely to attempt a pullback after it opens lower on Monday. The weekly charts also indicate consolidation in the broad trading range of 4,800-5,200. In case the index crosses 5,200, it may then try to reach 5,330.