<b>Tech Analysis</b>: Difficult to set upside targets

The markets continued to rally for the eight straight week. The Sensex zoomed past the milestone of 18,000, and in fact came quite close to the 19,000-mark in intra-day trades.

The Sensex began the week on a negative note, losing 282 points on Monday, but the bulls came back strongly to take the index way past the 18,000-mark. It also recorded its biggest single day gain of 789 points on the following day. With the bulls being in no mood to relent, the index saw a massive intra-week movement of 1,557 points, i.e. from a low of 17,287 the index soared to a lifetime high of 18,845. The Sensex finally ended the week with a gain of 3.6 per cent (646 points) at 18,419. The index has now gained a whopping 30.2 per cent (4,228 points) in the last eight weeks.

The short-term target of 19,000 for the Sensex, mentioned last week, remains intact. Given the pace of the rally, the index may easily zoom past this milestone.

With the index at new highs, it is difficult to set an upside target. But one has to keep an eye on key support levels to watch out for any trend reversal. The key support levels for the Sensex are 18,070-17,740-17,300.

The Sensex is likely to find support around 17,825-17,640-17,450 this week, while it may face resistance around 19,015-19,200-19,385.

Similarly, the Nifty ended the week with a smart gain of 4.7 per cent (242 points) at 5428. It has surged 24.3 per cent (1,320 points) in the last eight weeks. The key support level for Nifty is around 5400-5330-5250.

The Nifty is likely to face resistance around 5640-5700-5770 next week, while support on the downside could be around 5220-5155-5090.

The 14-day RSI (Relative Strength Index) for the Sensex and the Nifty continues to remain in overbought zone at around 77.

An RSI above 70 is said to be overbought, while an RSI below 30 is oversold.