Keep an eye on 17,150

Weekly Technical Analysis

Despite a positive start, the markets extended their losses for the fourth straight week as the major indices succumbed to unabated selling pressure in the latter half of the trading week.

The Sensex, which, rallied to an intra-week high of 18,895, tumbled to a low of 17,203 - a swing of 1,692 points - and finally settled with a significant loss of 769 points (4.2 per cent) at 17,645.

The index is down almost 18.5 per cent (3,363 points) in the last four weeks.

The week's high of 18,895 was exactly at the R3 (Resistance 3) level of 18,900, and the low of 17,203 was close to the important medium-term support level of 17,150 mentioned last week.

One needs to watch 17,150 this week as it is a crucial support level. On the upside, the Sensex will find strength above the 18,500-mark. A breakout above last week's high could see the index rally by another 1,000 points.

The Sensex may face resistance around 18,110-18,310-18,515 this week, while it is likely to find support around 16,820-16,620-16,415 on the downside.

The Nifty moved in a range of 431 points. From a high of 5,545, the index dropped to a low of 5,034 before settling with a loss of 197 points at 5,120. The index ended lower for the fifth straight week, shedding 18 per cent (1,154 points) during the period.

The Nifty is trading close to its 200-day moving average of 4,975 and may find support around this level.

The 20-day moving average is 5,413 and the 50-day moving average is 5,779.

The index is likely to find support around 4,955-4,905-4,850 this week, while it will face resistance around 5,285-5,335-5,390.