As expected, the ‘tug-of-war’ between the bulls and the bears continued, with the markets exhibiting high volatility. Although the week had just three trading sessions, the relatively heavy news flow — IIP data, Infosys results and monthly inflation data — kept market players on their toes.
The BSE benchmark index, the Sensex, started the week on a negative note owing to weak IIP numbers. However, from a low of 19,102, the index rallied sharply to an intra-week high of 19,737 in a ‘surprise rally’ a day ahead of the Infosys earnings. But, the gains were short-lived as the numbers failed to live up to the market expectations and, coupled with higher inflation numbers, the index wiped out all the gains and slipped back into negative terrain. The Sensex finally ended the week with a loss of 65 points at 19,387. In the process, the index also derailed its two-week rally, wherein it had gained 636 points.
Among the index 30 stocks, Hero Honda zoomed over 10 per cent as investors cheered hefty the payout plans of the company. Jaiprakash Associates, ITC, Larsen & Toubro and Bharti Airtel were the other major gainers. On the other hand, owing to the near 10 per cent fall on Friday, Infosys topped the losers’ list with a loss of 7.4 per cent at Rs 2,989. DLF, Jindal Steel and Wipro were the other major losers. Going ahead, corporate results will continue to impact the markets, although we may see mostly stock-specific action. The broader markets and the rate sensitive ones in particular may underperform on fears of a rate hike in the May policy review.
As per the monthly Fibonacci charts, the Sensex has not given either a buy or a sell signal. For a signal to be generated, the index will either have to cross 19,840 on the higher side for a buy signal, or fall below 19,050 for a sell signal this month.
The possibility of a positive breakout is higher on two parameters, viz the weekly MACD (Moving Average Convergence Divergence) and the Slow Stochastic are both in buy modes. However, the daily charts are currently looking a bit tired, but seem to have strong support around 19,070, which is also the 200-day Daily Moving Average.
The NSE Nifty moved in a range of 188 points; from a low of 5,736, the index soared to a high of 5,924, but eventually ended with a marginal loss of 18 points at 5,824.
The Nifty too needs to break out of the 5,720-5,950 range for a fresh breakout. An upside breakout can see the index jump to 6,030-6,100-6,160. On the other hand, a downside breakout will take us to targets of 5,635-5,570-5,510. The next week, we could see a slightly soft start and the Nifty may seek support around 5,750-5,710. As long as the index stays above these mentioned support levels, chances of a pullback will remain high, and on the upside, the index may face resistance around 5,895-5,940.