The Sensex ended higher, with a gain of 2.1 per cent for the second week, owing to foreign institutional investors (FIIs) buying support. It touched a high of 17,727 and ended the week at 17,558, a gain of 360 points.
So far this month, FIIs have bought stocks worth Rs 4,630, raising their investment to about Rs 56,000 crore this year.
Among Sensex stocks, Sterlite soared about nine per cent to Rs 111. Mahindra & Mahindra, Hindustan Unilever, Reliance, Hindalco, Tata Motors and Infosys were the other major gainers. Bharti Airtel slumped nearly 14 per cent to Rs 254. State Bank of India and Hero MotoCorp were the other notable losers.
According to the monthly Fibonacci chart, this week, the Sensex faced resistance around the R2 (second resistance level), at 17,752, before retracing its path a wee bit. The overall bias is likely to remain positive, as long as the index sustains above 17,460. On the upside, the index may attempt a move up to R3, at 17,875.
According to the quarterly charts, the bias for the Sensex is likely to remain positive, as long as the Bombay Stock Exchange benchmark index sustains above 17,430. On the upside, the index near-target would be 17,835, while the far-off target would be 18,140. Next week, the Sensex is likely to seek support at 17,400-17,300, while it may face resistance at 17,715-17,815.
The National Stock Exchange Nifty moved in a range of 117 points. After a gap-up opening at 5,261, the index surged to a high of 5,378, settling at 5,320, a gain of 105 points. The Nifty seems to be facing resistance at about 5,375, the higher end of the Bollinger Band of the daily charts. However, the bias is likely to remain bullish, as long as the index sustains above 5,260.
Select momentum oscillators like the Stochastic Slow entered the overbought territory, both on the daily and weekly charts. Similarly, the ADX (average directional index) is also at the lowest point on the weekly charts; neither the bulls, nor the bears, are strong enough at this point.
Therefore, it is possible we could see choppy movement in the coming days. The expected range for the Nifty is 5,260-5,380, with an upside extension to 5,450-odd levels. However, one should avoid long positions in case the index consistently trades below 5,260.