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| Breakouts look unconvincing |
| Rex Cano / Mumbai Aug 30, 2009, 00:13 IST |
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Markets started the week with a bang, consolidated mid-way and then ended on a high note. The Sensex began the week with a positive gap of 122 points, finally settled with a gain of 682 points (up 4.5 per cent). The index was expected to rise after crossing the 15,700-mark. However, expiry-related factors saw the index consolidate around those levels and ended firm at 15,922.
Among the index stocks — Tata Motors jumped over 13 per cent to Rs 490, Sterlite went up by nearly 11 per cent to Rs 696. Wipro, Jaiprakash Associates, Larsen & Toubro, DLF, Infosys, Reliance and Reliance Communications rallied 7-10 per cent each. However, Tata Steel and ONGC ended in the red with a loss of one per cent each.
The Sensex looks poised for a rally towards 17,000. However, the recent breakout above 15,700 was not followed by aggressive buying. Hence, one needs to watch the 15,800-15,670 band as any slip below these levels could see the index the weak zone again. The index has surged 7.51 per cent (1,113 points) in the last seven straight trading sessions, hence, some profit taking at higher levels is also on the cards.
Next week, the Sensex is likely to face resistance around 16,150-16,220-16,290, above which it may rally up to 16,800. On the downside, the index is likely to find support around 15,695-15,625-15,555.
The NSE Nifty moved in a range of 207 points, from an opening low of 4,537, the index rallied to a high of 4,744, and finally settled with a gain of 203 points (up 4.5 per cent).
The Nifty is likely to face resistance around 4,810-4,835-4,860, and may find support around 4,655-4,630-4,605.
Even though the index closed at the year’s high of above 4,730, the breakout does not look convincing. The index is currently close to the upper end of the Bollinger band, which is at 4,792. One can expect some resistance around these levels.
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