Wkly Tech Analysis: Chart indicates support at 5,347

The BSE Sensex exhibited high volatility this week amid global and domestic political concerns. After breaking below the 200-day moving average (DMA), the markets showed very little hope of recovery as every bounce was met by higher selling pressure.

The Sensex touched a high of 18,723 early in the week. From there it went on to tumble to a low of 17,927, down 796 points from the week’s high. The index finally settled with a loss of 388 points from 18,008.

Among index stocks, ITC plunged over nine per cent to Rs 153. Reliance Communications, NTPC, Hero Honda, HDFC, Tata Power, Reliance Infrastructure, Jaiprakash Associates, Mahindra & Mahindra, Maruti, Jindal Steel and Infosys declined four-eight per cent each. On the other hand, DLF and Hindalco rallied over six per cent each to Rs 237 and Rs 237, respectively. ONGC surged 4.8 per cent.

The NSE Nifty also exhibited high volatility, albeit in a range of 200-odd points. The index finally settled with a loss of 116 points at 5,396.

The monthly chart indicates support at 5,347, below which the index could slide to 5,230 or further to 5,060. The worrying fact is the yearly chart, which indicates support around 5,300 and 5,100, predicts that Nifty may decline towards 4,500-odd levels it it falls below 5,100.

The early part of the week seems to be crucial. If the Nifty is able to hold above the support of 5,350, one can harbour fresh hopes of a pullback.

ACC, Cipla, HDFC, Sterlite and Hindustan Unilever are likely to exhibit weakness in the weak ahead, while Larsen & Toubro, ONGC, PowerGrid, SBI and Wipro may trade with a positive bias.