The Sensex moved in a narrow range before closing 93 points lower last week. Down-closes in most of the recent sessions imply that the path of least resistance in the near-term is downward. That the index is moving below its 50-day simple moving average also denotes weakness.
There can be a decline to 20,277 or 19,848 in the week ahead. The presence of the 200-day moving average at the second target will lend critical support. The 38.2 per cent retracement support also helps make the zone between 19,800 and 20,000 an important support to watch out for.
Resistances for the week ahead are at 20,971 and 21,158. A close above the second resistance is needed to mitigate the negative short-term view.
The medium-term view for the index is positive. Index movement above 20,000 will mean that it can oscillate in the band between 20,000 and 21,500 for a few more weeks before the next major move.
NIFTY (6,171.4)
The Nifty, too, moved sideways before closing 39 points lower last week. The chart pattern suggests weakness in the short-term. The Nifty could break lower to 6,117, 6,040 or 5,916 in the days ahead. The short-term weakness will reduce only if the index moves above 6,272. Short-term traders can therefore go short in rallies, with stop-loss at 6,280.
A move above 6,280 will mean that the index is heading toward 6,415 and 6,582. The medium-term trend in the index stays positive despite the negative short-term view. The index has critical support around 6,000 and then at 5,925, where the 200-day moving average is positioned. The positive outlook will be threatened only on breach of the support at 5,925.
No comments :
Post a Comment