Bear phase to continue

WEEKLY TECHNICAL ANALYSIS

The sentiment remained bearish owing to RBI's rate hike move, political uncertainties, record inflation and crude oil, which hit $142 per barrel on Friday. The technicals, too, point to a further decline as the indices were not able to clear their short-term averages during the bounce back.

With no positive triggers, the markets may move sideways or fall further till the result season begins in second week of July.

The yearly Sensex chart suggests that the index is headed towards the 12,100-level. However, in the short-term, some pull back can be expected if the index sustains above 13,900. In all likelihood, this week should give us a fair idea as we get fresh monthly support and resistance levels.

This week, the index is likely to find support at 13,480-13,380-13,280, while resistance on the upside could be at 14,125-14,225-14,325.

The NSE Nifty swung in a range of 258 points. The index settled with a loss of nearly 5 per cent (211 points) at 4,137. The index has shed almost 20 per cent (1,021 points) in the last six weeks.

The Nifty may find considerable support around the 4,000-level, below which the index may drop to 3,780-3,550 levels.

The short-term (20-days) Daily Moving Average (DMA) is at 4,485. The 9-day RSI and MACD are also in oversold zones but showing no signs of a recovery.

The 14-day Stochastic Slow, however, shows some hope as it shows a positive divergence - the per cent K is above the per cent D line.