Wkly Tech Analysis: Market likely to drift lower

The market as expected drifted lower after giving a downward breakout. It may test further lows before bouncing back.

Last week, the Sensex moved in a range of 582 points. From a high of 17,275, the index dropped to a low of 16,693, and finally settled with a loss of 2.33 per cent (399 points) at 16,720.

Among the index stocks, ACC, Infosys and Wipro ended with gains of 6 per cent each. BHEL, TCS, Tata Motors, Bharti Airtel and Larsen & Toubro moved up 2-5 per cent. On the other hand, Sterlite and SBI plunged 8 per cent each. Reliance, ICICI Bank, HDFC Bank, DLF, HDFC and Reliance Communications declined in the range of 4-7 per cent.

The Sensex is most likely to head towards 16,200. The index may find support around 16,500-16,360 during the week. On the upside, the index is likely to face considerable resistance around 16,925-16,940 levels. A strong move above these levels will ensure a turnaround for the market.

The NSE Nifty moved in a range of 178 points, from a high of 5,157, the index slipped to a low of 4,979. The Nifty finally closed at 4,988, down 130 points.

The Nifty is now trading below its short-term (20-days) and medium-term (50-days) moving averages, and likely to drift towards the 100-day moving average. The 100-day moving average is around 4,865, while the long-term (200-days) moving average is around 4,320.

The momentum oscillators suggest that the down move may gain momentum in coming days. So be prepared for further fall during the week.