Wkly Tech Analysis: Bias to stay positive above 5,200

The Friday’s rally helped markets snap its five-week losing streak, as the BSE benchmark index, the Sensex, ended with a marginal gain of 42 points at 17,404. During the week, the index, as expected, dipped below the 17,000-mark, but bounced back sharply amid reports that the finance ministry may exempt P-notes from the GAAR regime.

Among the index stocks - Tata Steel surged nearly five per cent to Rs 470. Wipro, Maruti Suzuki, DLF and Coal India were the other major gainers. On the other hand, NTPC plunged over five per cent to Rs 163. BHEL, SBI and ICICI Bank were the other major losers.

Since we are at the start of a new month and a quarter, a mid-term view on the Sensex gives us the following support and resistance levels. In April, the Sensex is likely to face resistance around 17,800 and 18,100 level, while on the downside; the index is likely to seek support around 16,975 and 16,700.

Similarly, according to the quarterly Fibonacci charts, the Sensex is likely to face resistance around 18,600 and 19,370-odd levels in this quarter, while on the downside, the index is likely to seek support around 16,200 and 15,440.

The NSE Nifty moved in a range of 171 points, the index slipped to low of 5,136, but recovered sharply to touch a high of 5,307. The index finally settled with a marginal gain of 17 points at 5,295. However, on the month bias, after two back-to-back gains, the index was down 90 points for March.

According to technical charts, the markets are slightly in confused state, as the short-term trend, based on the price and moving average, has turned negative on the daily charts, but momentum oscillators have turned favourable for an up move.

On the other hand, as per the weekly charts, the price action indicates a neutral trade, but momentum oscillators are in favour of the bears. However, on the positive front, the index has consistently maintained its support around the medium-term moving average at 5,218.

Going forward, one can say that the bias is likely to remain positive as long as the Nifty sustains above 5,200. However, we need to wait for select indicators to turn positive for a sustained up move.

On its way up, the Nifty is likely to face resistance around 5,385 and 5,450, above which the index can re-test its recent high of 5,600-odd levels. On the flip side, a break and sustained trade below 5,200, can take the index to its next significant support at 5,085 - 20-WMA (weekly moving average).