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| Market rally likely to sustain for a while |
| Rex Cano / Mumbai May 03, 2009, 00:15 IST |
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The Bombay Stock Exchange’s Sensex bounced back on Wednesday — the last trading day of the truncated week and for derivatives expiry — on the back of sharp gains in information technology and banking stocks.
The index at first tumbled to an intra-day low for the week at 10,962, but eventually closed with a gain of 74 points at 11,403. In the process, the index has jumped 37 per cent (3,077 points) in the last eight trading weeks.
Last week, ICICI Bank and Jaiprakash Associates, with gains in excess of 10 per cent, were the major gainers among the index stocks. Sun Pharma, TCS, Wipro and Infosys surged 4-7 per cent. On the other hand, Tata Steel declined nearly 9 per cent to Rs 261. Reliance Communications, Reliance Infrastructure, Hindalco, Ranbaxy, DLF, HDFC, Tata Motors and ACC declined in the rage of 4-7 per cent.
The intra-week correction has helped the index come down from the overbought zone to positive. Also the momentum indicates that the index is likely to sustain the rally for at least one more week. In the coming week, the index may face resistance around 11,600-11,730 and find support around 11,200-11,075.
The larger picture for the month suggests that the index is likely to find considerable support around 11,200, and further lower at around 10,630. Any breach of 10,630 would indicate the end of the current upmove. On the upside, the index is likely to achieve its medium-term target of 12,600 this month.
Unlike the Sensex, the NSE Nifty broke its seven-week winning streak and ended with a marginal loss of seven points at 3,474.
The index is flirting with the 200-day DMA (Daily Moving Average) for the last two weeks, but now seems poised for a strong upmove. The index may target the 3,780 levels (200-day Weekly Moving Average) in the very near term. On the downside, the 3,300-level seems to be the near support level for the index.
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