Bias to remain positive above 17,000 levels

The markets registered strong gains, the best in the last six weeks, after IT major Infosys set the tone by raising its full-year guidance. The Sensex surged to a high of 17,112 and finally settled with a gain of 17,083 - up 5.2 per cent (up 850 points).

Among the index stocks Tata Motors zoomed over 13 per cent to Rs 180. Infosys rallied 9.5 per cent to Rs 2,507. Jindal Steel, Wipro, Bajaj Auto, TCS, Bharti Airtel, Reliance, ICICI Bank and SBI were the other major gainers. On the other hand, Maruti Suzuki and Coal India were the major losers.

According to the monthly Fibonacci charts, the bias is likely to remain positive as long as the Sensex remains above the 17,000-mark. On the upside, the index may face some resistance around the 17,200-17,330 level. In case the Sensex fails to sustain above the 17,000-mark then we could see some profit making with support coming around 16,760, and deeper down around 16,450-odd levels.

The NSE Nifty moved in a range of 260 points — from a low of 4,882 the index rallied to a high of 5,141, and finally settled with a gain of five per cent (244 points) at 5,132. The weekly charts indicate the Nifty has once again bounced back from its key support level of 4,800. The charts indicate the index could now head to 5,235, which is the short-term resistance on the weekly charts.

Among momentum oscillators, the MACD (Moving Average Convergence / Divergence) and the Stochastic Slow seem to be in favour of a further up move. However, the Average Directional Index (ADX) indicates that the up move lacks strength, hence may not be sustainable at higher levels.

Next week, the Nifty is likely to face resistance around 5,230-5,295, and on the downside the index may seek support around 5,035-4,970.