Wkly Tech Analysis: 17,370 critical for upside

The stock market was volatile and moved in a narrow range during the week. Global cues were mostly subdued, and news flows were largely positive, resulting in limited downsides on weak days. However, the indices failed to give a clear breakout on the upside as well.

The Sensex moved in a range of 409 points, from a low of 16,943, the index rallied to a high of 17,352, and settled with a marginal gain of 17 points at 17,119.

Among the index stocks — BHEL and Bharti Airtel surged 7 per cent each to Rs 2,364 and Rs 331, respectively. Larsen & Toubro, Infosys and Reliance Communications moved up 2-4 per cent each. On the other hand, Sterlite and Tata Steel shed 5 per cent each at Rs 841 and Rs 546, respectively. Hindalco, Sun Pharma, SBI and Reliance declined 2-4 per cent each.

Currently, the market is critically poised. The Sensex is trapped in a narrow range of 16,940-17,370. A breakout in either direction may set its the future course. On the upside, the index may rally beyond 18,000 during the course of the month, once it sustains above 17,370. In case of a downward breakout, the index may first seek support around 16,200, and then dip to 15,800.

The NSE Nifty moved in a narrow range of 131 points. The index touched a fresh 18-month high of 5,182.55 on Friday, but retreated soon and ended the week on a flat note at 5,117, up eight points.

The index is likely to show strength only on a clear breakout above the 5,180-5,200 resistance zone. On the downside, a break below 5,030 could see the index slide up to 4,890-4,800.