The markets logged significant losses for the third consecutive week. This resulted from weakness in global markets, after the US Federal Reserve hinted it was likely to taper its $85-billion bond buyback programme.
The Sensex registered a high of 19,384 early in the week. Subsequently, it tumbled to a low of 18,615, down 768 points from the week's high. The BSE benchmark index ended the week at 18,774, a loss of 406 points. In the last three weeks, the Sensex has shed five per cent (986 points).
Among the Sensex stocks, Jindal Steel was the major loser for the second consecutive week. The stock plunged 16 per cent to Rs 204 (in the previous week, it had fallen 13 per cent). Hindalco slumped 11 per cent to Rs 93.6. NTPC, ICICI Bank, HDFC Bank and Gail India were the other major losers. Bajaj Auto rallied four per cent to Rs 1,830. Wipro, Maruti Suzuki, Hero MotoCorp and Bharti Airtel were the other prominent gainers.
According to the monthly Fibonacci charts, the Sensex has given a 'sell' signal once again. As long as the BSE index sustains below 19,070, the bias is clearly in favour of the bears. In the interim, the index may face near-resistance at 18,835-odd levels. On the downside, it may test its quarterly support at 18,200-odd levels.
Next week, the Sensex is likely to move in a broad range of 18,300-19,250, with interim support expected at 18,480 and 18,390. It may face resistance at 19,065-19,160.
The National Stock Exchange Nifty closed below all its key moving averages---20-daily moving average (DMA), 50-DMA and 200-DMA---for the first time in about two months. The index moved in a range of 247 points, settling at 5,668, a loss of 141 points.
Key momentum oscillators such as the moving average convergence divergence, the Relative Strength Index and the Stochastic Slow, both on the daily and the weekly charts, are now in favour of the bears.
The NSE index seems to be headed towards the lower end of the Bollinger Band on the weekly charts, which indicates a target of 5,500. The next support could be around the 50-weekly moving average, at 5,405-odd levels. The monthly charts are also fairly bearish and indicate targets of 5,470 and 5,350-odd levels in the near future.
The short-term bias for the Nifty is likely to remain bearish, as long as the index sustains below 5,755. In case it breaks above it, the next hurdle would be around 5,820. To sum up, the Sensex is likely to test 18,200-odd levels in the near term. Key hurdles are at 18,835 and 19,070. The bias for the Nifty is likely to remain bearish below 5,755. The downside target could be at 5,500 or 5,350-odd levels.
