Wkly Tech Analysis: Bias to remain positive above 6,040

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Last week, the markets recorded fresh two-year highs, owing to aggressive buying in energy shares like Reliance and Oil and Natural Gas Corporation Limited  (ONGC). The Sensex started the week with a marginal positive gap of 26 points at 19,689, and didn't look back. The index rallied to a high of 20,126, ending at 20,039, a strong 1.9 per cent gain.

Among the Sensex-30 stocks, ONGC soared 15.5 per cent to Rs 338. NTPC, Bharti Airtel and Reliance rallied about seven per cent each. Gail India and ITC were the other major gainers. Wipro and Mahindra & Mahindra plunged about five per cent each to Rs 397 and Rs 885, respectively. Hero MotoCorp, Sun Pharma, Hindalco, Sterlite and Bajaj Auto were the other major losers.

According to the Fibonacci charts, the Sensex has cleared all monthly hurdles and the (R2) resistance 2 on the quarterly charts. The BSE benchmark index may now face resistance at 20,265-20,365, before storming its way to 21,050-odd levels.

As long as the Sensex sustains at levels above 19,950, the bias is likely to remain fairly bullish. The weekly Fibonacci charts suggest support for the index at 19,870-19,770.

The NSE Nifty moved in a range of 120 points. From a low of 5,962, it surged to a fresh two-year high of 6,083, before ending at 6,064, a gain of 113 points. On the flip side, failure to sustain at more than 6,040-odd levels could be signs of weakness for the market, following which the index could re-test 5,950-odd levels.

The momentum oscillators on the daily and weekly charts are yet to give any clear indication.  Therefore, the early part of the trading week is likely to determine the trend for the rest of the week.

For a sustained up-move, the Nifty needs to clear its near-resistance at 6,100. On the flip side, a break of 6,040 could trigger a correction to 5,950-odd levels.