Nifty may re-test 3,150

The markets moved on expected lines last week with the Nifty exhibiting weakness below the 2,835-mark. The index hit a low of 2,702, and finally closed with a loss of 45 points at 2,828, despite a good quarterly performance by IT giant Infosys and decent gains recorded by blue-chip Reliance.

The bollinger bands have now expanded to a broader range of 2,700-3,175. Although, the markets may move up early next week, but chances of a continued uptrend remain bleak. For any sustainable rally, the index needs to comprehensively break above the 3,150-mark. The 2,700-level will act as an immediate support level for the index.

This week, the index may see rangebound trading with support around 2,725, and resistance around 2,930-2,960. In case, the index sustains itself above 2,960, then it may re-test the 3,150-mark.

The Sensex moved in a range of 466 points, from a high of 9,341 to a low of 8,947, before settling with a loss of 83 points.

Among the index stocks — Infosys, Reliance, Reliance Infrastructure, Mahindra & Mahindra and Tata Power gained 3-6 per cent each. On the other hand, Tata Power declined by 10 per cent to Rs 218. HDFC Bank, ICICI Bank, TCS, Tata Motors, Grasim, Wipro, HDFC, Hindalco, Tata Steel, Hindustan Unilever and Sterlite shed 5-8 per cent each.

The Sensex has given a sell signal on the monthly charts and, hence, is likely to face stiff resistance on the upside. Key resistance for the index would be around 9,600-9,650, above which the index may spurt to 10,025. On the downside, the index is likely to test 8,600 in the coming days.