Sensex may fall below 17,000

The markets ended lower for the second consecutive week amid lacklustre movement for the major part of the trading day. The Sensex moved in a fairly thin range of 280-odd points. The BSE benchmark index from a low of 17,039, rallied to a high of 17,319, only to slip back in red and end at 17,158, down 55 points for the week.

Among the Sensex stocks, Tata Motors tumbled over five per cent to Rs 223. Maruti Suzuki India, Dr.Reddy’s Lab, Tata Steel, Mahindra and Mahindra, NTPC, Tata Consulatncy Services and State Bank of India were the other prominent losers. On the other hand, two-wheeler major Bajaj Auto zoomed over six per cent to Rs 1,591. Bharti Airtel, Coal India, Housing Development Finance Corp and Sterlite Industries were the other notable gainers.

As per the monthly Fibonacci chart, the Sensex has given a sell signal, which means the index is likely to drop below its recent low of 17,039. On the downside, the index can slip to 16,780-16,580-16,375. Whereas, on the upside, the Sensex is likely to face considerable resistance around 17,430.

The NSE Nifty moved in a 90-odd points range. The index touched a low of 5,169 and a high of 5,258, before settling with a loss of 22 points at 5,205.

Despite the weakness, the NSE index has managed to sustain above its 20-WMA (weekly moving average). The 20-WMA is at 5,165. Break of 20-WMA may lead the index to its 50 WMA at 5,085-odd levels.

Select weekly momentum oscillators like the MACD (moving average convergence/divergence) and the Stochastic Slow continue to remain in the buy mode, although they seem to be tiring out. On the other hand, both MACD and Stochastic Slow are in sell mode on the daily charts, hence one can expect some selling pressure in the first half of the week.

As per the weekly charts, the Nifty is likely to face considerable resistance in the 5,250-5,285 range. On the downside, the index can seek support at around 5,090-odd levels, below which we could see heavy selling.