Rally likely to continue

WEEKLY TECHNICAL ANALYSIS

The markets witnessed high volatility, as expected, in the first half of the trading week. Thanks to the Tata-Corus deal and the mid-term credit policy review.

The Sensex dropped to an intra-week low of 14,046, only to bounce back strongly to higher levels. The index soared to a new all-time intra-day high of 14,463 - up 417 points from the week's low. The upmove was led by select auto, finance and telecom stocks. 

ON A ROLL
	Sensex	Nifty
R3	14660	4265
R2	14610	4250
R1	14560	4235
Close	14404	4184
S1	14245	4135
S2	14195	4120
S3	14145	4100
S-Support level  R-Resistance level

The Sensex finally settled higher for the sixth straight week, up 121 points at 14,404. In the process, the index has gained 932 points in the last six weeks.

Similarly, the Nifty after dropping to a low of 4069, bounced back sharply to all-time intra-day high of 4199 - an intra-week swing of 130 points - before finishing with a gain of 36 points at 4,183. The Nifty has gained 312 points in the last six weeks.

Our short-term target of 14,500, is almost at hands. If the Sensex is able to sustain above this level, then we may see a quick rally to 14,900.

The weekly resistance levels are placed at 14,560-14,610-14,660, while on the downside the support levels are at 14,245-14,195-14,145.

The Nifty has potential to rally another 100 points from current levels. While the index may face resistance around 4235-4250-4265, support is likely at 4135-4120-4100.

ITC (Rs 176): The stock looks over-bought at current levels, and is likely to face stiff resistance around Rs 181-182. On the downside, the stock may slip to Rs 164-166 levels.