WKLY TECH ANALYSIS: Nifty likely to decline to 2,930

Relentless selling in index heavyweights saw the Sensex dropping for the fourth straight week. The selling pressure was so intense, especially on Friday, that the index tumbled below the major psychological 10,000 mark to a low of 9,911 and ended the day with a loss of 5.2 per cent (553 points) at 9,975.

In the process, the index has shed 29 per cent (4,067 points) in the last four weeks and is down a whopping 53 per cent (11,232 points) from its all-time high of 21,207 that it touched on January 10 this year.
 

KEY LEVELS
	Sensex	Nifty
S3	8760	2700
S2	9000	2775
S1	9225	2845
Close	9975	3074
R1	10725	3305
R2	10955	3375
R3	11200	3450
S-Support level R-Resistance level

Last week, it was mentioned that for the index to give a meaningful pull-back, it needs to clear the resistance zone of 11,550-11,730. As a matter of fact, the index did cross the upper end of the resistance zone in intra-day trades on Tuesday, but failed to stay above it. Following this, the index yet again began to decline.

The current downward momentum suggests that we are heading towards the 138.2 per cent yearly retracement support level of the 9,000-odd level. This should indeed be an interesting level to watch out for.

On the positive side, a close above the 10,730-11,030 zone should trigger a fresh upmove. The NSE Nifty slipped over 6 per cent (206 points) to 3,074, and is down 27.5 per cent (1,171 points) in the last four weeks.

All indicators on the NSE chart continue to remain in an extremely-oversold zone. Hence, a sharp pull-back from current levels cannot be ruled out. While the Sensex is heading towards the 138.2 per cent retracement level, the Nifty is yet to test its 122 per cent retracement level, which is at 2,930.

The Nifty is likely to face resistance around 3,300-3,375-3,450, while support on the downside would be around 2,845-2,775-2,700.