Wkly Tech Analysis: Fresh up move only above 15,700

Last week, markets moved on expected lines with the Sensex finding support precisely at 14,700. On the upside, the index could manage to touch a high of 15,545. The expected range of 14,700-15,700 was not violated in either direction.

The Sensex began the week on a negative note and went on to touch a low of 14,701. However, short-covering, coupled with positive news flow in form of strong IIP numbers and proposed tax breaks in the draft direct tax code, saw the index surge to a high of 15,545. The Sensex finally ended with a gain of 1.7 per cent (251 points) at 15,412.

Among the index stocks, Tata Motors zoomed nearly 13 per cent to Rs 467. ONGC, DLF, Hindalco, Bharti Airtel, Sterlite and Tata Power rallied 5-7 per cent each. Mahindra & Mahindra shed nearly 5.5 per cent at Rs 789. Hindustan Unilever, ACC, Grasim, NTPC and HDFC declined 3-5 per cent each.

Going forward, the Sensex needs to sustain above the 15,670-15,700 band for a fresh upmove. On the other hand, if the index stays below 15,670 for a longer time, it is likely to slide all the way below 14,700, to 14,100.

The NSE Nifty moved in a range of 260 points. From a low of 4,359, the index rallied to a high of 4,619, and finally settled with a gain of 2.2 per cent (99 points) at 4,580.

The Nifty violated the medium-term (50-day) simple moving average in intra-day trades but bounced back soon. The index is currently above its short-term (20 days) moving average, which is a positive sign. The 20 days moving average, at 4,551, is also above the medium-term moving average of 4,403, which is also a positive indicator. The bollinger bands, which have narrowed down to 340-odd points, suggest a range of 4,721-4,381.

This week, the index may face resistance at 4,680-4,710-4,740 and find support around 4,480-4,450-4,420.