The markets exhibited high volatility this week as traders geared up to the second quarter earnings and the mega Coal India initial public offer. The Sensex started the week on a soft note, firmed up mid-way during the week, only to slip again at close. After touching a fresh 32-month high of 20,855, it settled with a loss of 125 points at 20,125.
Among index stocks, NTPC and Bharti Airtel plunged five per cent each to Rs 203 and Rs 334, respectively. Reliance Communications, Larsen & Toubro, SBI, DLF and BHEL were the other major losers. Tata Motors rallied nearly five per cent to Rs 1,157. Sterlite and Wipro were the other major gainers.
Last week, I had mentioned that the bulls should not have anything to worry as long as 20,030 holds. Currently, the index is fairly close to this important level, below which the index may slip to 19,835.
Technically, the MACD, nine-day RSI, Stochastic Slow and ADX (average directional index) indicators reveal the bulls are losing their grip. However, the weekly MACD continues to remain in favour of the bulls.
The NSE Nifty moved in a range of 234 points — from a high of 6,284, the index dropped to a low of 6,050. It ended with a loss of 41 points at 6,063.
The index has closed marginally below its short-term (20-days) moving average, which is at 6,080. The index will exhibit strength above it, while on the downside it may test the lower end of the bollinger band, which is around 5925.
It seems the bears have managed to sneak into the bull’s camp. As the upside for the Nifty looks capped around 6250, on the downside, the index may slip all the way to 5,550-5,600 in the coming weeks.