The Sensex, as expected, broke the 17,000-level and tumbled to a low of 16,598 during the week. The BSE benchmark index eventually ended with a loss of 319 points at 16,839.
Among the Sensex stocks, Hindustan Unilever Ltd scaled to a new summit at Rs 478, and ended the week with a gain of four per cent at Rs 465, backed by strong quarterly earnings. On the other hand, State bank of India slumped over nine per cent to Rs 1,941. Bharat Heavy Electricals Ltd, too, tumbled nine per cent to Rs 208. Wipro Ltd, Jindal Steel and Power Ltd, Larsen and Toubro Ltd, Tata Power Co Ltd and Tata Motors Ltd were the other major losers.
As per the monthly Fibonacci chart, the Sensex may have taken support around the S2-level, which is at 16,580. For confirmation of the same, the index needs to fulfil two conditions. Firstly, it should move above 17,055, and secondly it should not slip below 16,780.
In case the index slips below 16,780, it could re-test 16,600-odd levels. The next monthly support level for the index is at 16,380.
Similarly, the quarterly charts indicate that the Sensex should sustain above 16,720. Failure to sustain above 16,720 could see the index slip to the next two support levels, which are placed at 16,500 and 16,280, respectively.
A fall below 16,280 could be very bearish for the markets as that could mean a sell signal on the quarterly charts (June-August).
On the positive front, the index needs to sustain above 17,050 for fresh upside momentum to begin.
The Nifty is currently testing support around the 200-day daily, moving average (DMA) on the daily charts. The momentum seems to have turned in favour of the bears, and is likely to remain bearish as long as the index remains below 5,160.
The weekly charts indicate the index could fall to 4,850-odd levels in the medium term. A fall below 4,800-odd levels could spell significant trouble for the markets as per both the weekly and the monthly charts.
As per the weekly charts, the Nifty is likely to face considerable resistance in the 5,150-5,180 level. On the downside, the index can seek support around 5,050-5,020.