More pain likely

The markets showed no signs of respite, trending lower through the week, amid a weak rupee, liquidity-tightening measures and disappointing numbers by select companies. The Sensex ended in the red on all trading days. It ended the week at 19,164, down 584 points.

Among the Sensex 30 stocks, Coal India and ITC were the major losers, down about 10 per cent each at Rs 255 and Rs 333, respectively. ONGC, Hindalco, NTPC, Tata Steel and Hindustan Unilever plunged seven-nine per cent each. BHEL, Bajaj Auto, Sterlite, Tata Power and ICICI Bank also ended with significant losses. Wipro soared 14.5 per cent to Rs 439. TCS, Infosys and Bharti Airtel were the other prominent gainers.

According to the monthly Fibonacci charts, the Sensex just about managed to stay afloat at its nearest support level (19,075-odd levels). In case the index sustains above 19,075 in the near term, one can expect a pull-back from these levels. However, breach of 19,075 could see the Sensex fall to its next significant monthly support at 18,880-odd levels, a break of which could trigger a fresh fall to 18,500-odd levels. On the positive side, in case it holds above 19,075, it would have to sustain above 19,350 to reverse the current downtrend.

According to the weekly Fibonacci charts, the Sensex is likely to move in a broad range of 18,750-19,580 next week. In the interim, it might seek support at 18,900-18,830 and face resistance at 19,420-19,500.

From an early high of 5,886, the National Stock Exchange Nifty tumbled to a low of 5,649, settling at 5,678, a steep fall of 208 points. Following the current correction, the Nifty has filled its entire gap around the 5,700-5,750 range. The index may seek support at 5,600-odd levels in the near term, as select momentum oscillators such as the daily Stochastic Slow are in oversold territory.

However, key momentum oscillators such as the Average Directional Index and the Stochastic Slow have shown a fresh negative divergence on the weekly charts. Therefore, any pull-back from current levels might be temporary.

On its way up, the index is likely to face significant resistance at 5,800-5,850 and 5,930-odd levels. The weekly charts indicate the Nifty might side to 5,450-odd levels, around its 200-weekly moving average.

To sum up, the Sensex has near-support at 19,075, below which it could test 18,880 or slide to 18,500-odd levels. The Nifty is oversold on the daily charts; therefore, it might look to bounce back. It might seek temporary support at 5,600-odd levels, but might tumble to 5,450-odd levels in the short-to-medium term.