Week Ahead: Support for Sensex @ 17,150

The markets extended losses for the fourth straight week, and both the major indices succumbed to unabated selling in the latter half of the week ended February 8.

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 loss of 769 points (4.2%) at 17,645. The index is down almost 18.5% (3,363 points) in the last four weeks.

The 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.

One needs to watch 17,150 as the crucial support level for the Sensex next week. While the Sensex will find strength above the 18,500-mark, a breakout above the week's high (18,895) could see the index rally another 1,000 points.

While the Sensex is likely to face resistance around 18,110-18,310-18,515, the index is likely to find support around 16,820-16,620-16,415.

The NSE 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, and has declined 18% (1,154 points) during the period.

The Nifty, which  is currently trading close to its 200-day moving average of 4,975, may find support around this level. The 20-day moving average is at 5,413, and the 50-day moving average is at 5,779.

The Nifty is likely to find support around 4,955-4,905-4,850, while the index is likely to face resistance around 5,285-5,335-5,390.