The markets exerted downward pressure for a better part of the week owing to global concerns and weakness in the banking sector. The Sensex dropped to a low of 15,746, but bounced sharply in tandem with recovery in the global markets towards the end of the week. The Sensex finally settled with a loss of 1.3 per cent (221 points) at 16,233.
State Bank of India was the top loser among the Sensex stocks following Moody’s downgrade — citing concerns of the bank’s limited ability to manage its capital. Bharti Airtel, ICICI Bank, Hindalco, Jindal Steel, HDFC Bank and Hindustan Unilever were the other major losers. Maruti and Larsen & Toubro rallied nearly three per cent each to Rs 1,113 and Rs 1,393, respectively. Tata Motors and Sun Pharma were the other prominent gainers.
According to the monthly Fibonacci charts, the Sensex has given a sell signal for the month. The Sensex may now look to re-test this week’s low of the 15,750-odd level, a break of which can see the index drop to 15,580. However, the index seems to have taken support on the quarterly charts, which indicated support around 15,715, a break of which can trigger a fresh fall up to the 15,170-odd levels.
On the other hand, to confirm the bearish trend, the Sensex is likely to face considerable resistance around 16,450. All in all, it looks like we may see range-bound trading with a slightly negative bias next week. The major pivot points to watch out for are 16,450-16,600 on the upside and 16,000-15,850 on the downside.
The NSE Nifty moved in a range of nearly 200 points. From a low of 4,728, the index moved up to touch a high of 4,923. The Nifty eventually ended with a loss of 1.1 per cent (55 points) at 4,888.
As per the weekly and monthly charts, the Nifty managed to claw its way back above the crucial levels of 4,805 and 4,870, respectively, on a closing basis. However, the momentum oscillators are clearly in favour of a downtrend, hence we could see the index exert downward pressure in the next week.
The Nifty is likely to face strong resistance around 4,960, which is the short-term moving average, above which the index may face resistance around 5,050 — its medium-term moving average. On the downside, the index may re-test 4,740, while a weekly close below 4,800 could spell fresh trouble for the Nifty. Next week, the Nifty is likely to face resistance around 4,960-5,010 and on the downside, the index is likely to seek support around 4,815-4,770.
