Nifty likely to hit 5,350

Smart gains in the last two trading days of the week helped the markets maintain its winning streak for the seventh straight week. The markets started the week on a cautious note as a mid-week holiday and the derivatives expiry weighed on the sentiment. However, some short-covering on Thursday coupled with fresh buying on Friday ensured weekly gains.

The Sensex touched a low of 17,337 early in the week. However, it rallied to a high of 17,683, and finally settled with a gain of 67 points at 17,645. The index is now just 150 points away from its recent January high, above which it will soon be at a fresh 25-month high.

In the week under review, HDFC Bank was the major gainer among the Sensex stocks. The stock gained 7 per cent at Rs 1,948. Sun Pharma, Hindustan Unilever, ONGC and Hero Honda rallied 2-4 per cent. On the other hand, DLF shed 5.5 per cent at Rs 295. Tata Motors, ACC, HDFC, Maruti and Jaiprakash Associates declined 2-4 per cent.

Next week, the markets are likely to start on a positive note given the momentum. However, once at fresh highs, some amount of profit-taking is expected, as the rally too has now been seven weeks old.

The Sensex may face resistance around 17,850-17,950, while it is likely to find considerable support around 17,500-17,430.

The NSE Nifty moved in a range of 107 points, from a low of 5,187, the index rallied to a high of 5,294. The index finally settled with a gain of 11 points at 5,274. The index has surged 516 points in the last seven weeks.

Next week, the index may face resistance around 5,340-5,350, while it may seek support around 5,230-5,205.

The short- and the medium-term trends are fairly bullish. The intermediate trend may turn negative only on a fall below 5,055. The momentum indicators too are positive, barring the Stochastic slow, which is a slight worry for it has made a lower high in the second leg.