Wkly Tech Analysis: Bulls to hold sway above 17,380

The markets struck positive notes at the beginning of the year with the benchmark indices touching their fresh 22-month highs. The Sensex scaled a high of 17,790, but eventually ended with a marginal gain of 75 points at 17,540 this week. Mid- and small-caps outperformed the benchmark with significant gains of 3.4 per cent and 4 per cent, respectively.

Grasim was the top gainer among the Sensex stocks, up 11 per cent at Rs 2,755, followed by Jaiprakash Associates, up 10 per cent at Rs 162. DLF, Hindalco, Tata Power, Mahindra & Mahindra, Sterlite, Tata Steel, ACC, Reliance Communications and Sun Pharma were the other major gainers. On the other hand, Maruti plunged over 8 per cent to Rs 1,433. TCS slumped nearly 7 per cent to Rs 701. Infosys, Hero Honda and HDFC were the other prominent losers.

The Sensex has been moving in a narrow band for the last two weeks. Going forward, this week’s high and low could dictate the trend for the rest of the month. The index may face resistance around 17,800-17,830, while support on the downside at 17,380 is very crucial. As long as the index stays above this level, bulls will continue to hold an upper hand and the index may target 18,000 during the month.

The NSE Nifty moved in a range of 62 points. From a low of 5,160, the index rallied to a high of 5,222, but ended 44 points higher at 5,245.

The corresponding crucial level for the Nifty is 5,180. Below, 5,180, the index may soon drift to 5,040. On the higher side, the index is likely to face considerable resistance around 5,300-5,335.

The Nifty short-term moving average is 5,134, medium-term at 5,032, while the long-term moving average is at 4,468.

Expect a rise in volatility, as the results season kicks in with Infosys results coming on Tuesday. As more numbers start coming in, the markets are likely to take cues from there.