Seeking direction

WEEKLY TECHNICAL ANALYSIS

The Sensex held the near support of 14,355 for the first three days of the week but eventually broke it and dipped to a low of 14,137. The index finally ended with a loss of 323 points at 14,401.

The markets are now precariously poised. Given that the Sensex closed above the support level of 14,355, it is likely to move up. However, the index is more likely to test its short-term support of 13,350-13,500. Resistance on the upside would be around 14,830-14,930.

Among the index stocks, Ranbaxy moved up 4.6 per cent to Rs 500. Hindustan Unilever, HDFC Bank, Tata Power and Sterlite were the other notable gainers.
 

KEY LEVELS
	Sensex	Nifty
S3	13975	4205
S2	14050	4230
S1	14140	4250
Close	14401	4325
R1	14665	4405
R2	14750	4425
R3	14830	4450
S-Support level  R-Resistance level

On the other hand, ACC and SBI plunged around 8 per cent each to Rs 610 and Rs 1,458 respectively. Satyam, Grasim, NTPC, Mahindra & Mahindra, ONGC, ITC, Jaiprakash Associates, Reliance Communications and ICICI Bank were down 4-6 per cent each.

The Nifty moved in a range of almost 200 points. From a high of 4,447, the index slipped to a low of 4,248 and finally ended with a loss of 103 points at 4,327.

With no clear signals from the charts, there could be two possibilities this week. In the first case scenario, the index may display range-bound movement from 4,400-4,450 to 4,200-4,250. And, in the second case scenario, the index may make rally up to 4,530 and then drop to test its key support around 4,050.

The RSI around 50-odd levels does not suggest anything. The moving averages are positive, while the MACD and Stochastic Slow are giving negative signals.