Wkly Tech Analysis: Key resistance at 9,830 level

The markets began on a strong note this week, exhibiting rangebound movement mid-week before ending with a 334-point gain on Friday. The benchmark Bombay Stock Exchange’s Sensex registered a high of 9,725, and a low of 9,329, before ending the weekend at 9,635.

Among the index stocks, Mahindra & Mahindra and DLF zoomed 17 per cent and 16 per cent, respectively. Reliance Communications, Larsen & Toubro, Jaiprakash Associates, HDFC, Maruti, Bharat Heavy Electricals, ACC, State Bank of India, and ICICI Bank rallied in the range of 7-12 per cent.

Among the key losers this week, Ranbaxy shed 5 per cent, while Grasim and Infosys Technologies were down around 3 per cent each. The key thing last week was that the index after clearing the 9,425-9,515 resistance zone, managed to hold its head above it throughout the period. However, a convincing buy signal still eludes the market. The index needs to clear 9,830 soon, in order to rally past the 10,000-mark.

KEY LEVELS
Index	Sensex	Nifty
R3	9880	3030
R2	9830	3015
R1	9785	3000
Close	9635	2948
S1	9485	2890
S2	9435	2885
S3	9390	2870
R = Resistance,  S = Support

The key resistance for the benchmark index this week and the next would be 9,830, above which the index can rally up to 10,125, and further to 10,560. However, in case the index breaks 9,425 on the downside, then the index may fall below the 9,000-mark.

This week, the markets are likely to see a broader range or more volatility as the government unveils its interim Budget for 2009 on Monday.

The Nifty moved in a range of 130 points, from a low of 2,840 to a high of 2,970, and finally ended with a gain of 105 points at 2,948.

The Nifty is likely to face some resistance around the 2,980-3,000 levels, above which it can rally to 3,060. On the downside, 2,870-2,875 will be the key support area for the index.

The Nifty is currently above both its short-term (20-days) and mid-term (50-days) simple DMA, which are placed at 2,824 and 2,876, respectively. The long-term (200-days) DMA is at 3,790.