Nifty may move in 5,050-5,400 range

The markets ended the volatile week with marginal losses. Global cues, especially from the US and the UK, dominated our markets. The Sensex touched a high of 17,795 early in the week and thereafter dropped to a low of 17,374. The index finally settled with a loss of 114 points at 17,461.

Among index stocks, Sterlite and Jindal Steel shed around 4.5 per cent each. They were followed by Tata Steel, Hindalco, Cipla, BHEL, TCS, ICICI Bank and Mahindra & Mahindra, which were down two-three per cent. ONGC and NTPC gained over 3 per cent, followed by Reliance Infrastructure, Larsen & Toubro and Hindustan Unilever.

The monthly range for the Sensex is support around 17,100-16,700 and resistance around 18,300-18,700. The next week, the index is likely to seek support around 17,300-17,200 and face resistance around 17,620-17,720.

The NSE Nifty moved in a band of 129 points — from a high of 5,339, the index dropped to a low of 5,210, and finally ended the week with a loss of 32 points at 5,237.

Early warning signs are coming from the MACD, which has turned negative, and also the Directional Index, which indicates that the strength of the upmove is weakening. The Stochastic slow is also declining.

However, the major trend continues to remain bullish as the short-term moving average is above the medium-term moving average. Going forward, major losses look unlikely as the Nifty is likely to seek support around 5,140 (50-days DMA) and 5,075 (200-days DMA). Broadly speaking, the Nifty is likely to move in a trading band of 5,050-5,400 in month of July.