Wkly Tech Analysis: Nifty likely to test support at 5,535

The markets broke its five-week winning streak as global cues and political turmoil played spoilsport. The Sensex from a high of 18,969, dropped to a low of 18,581. The BSE benchmark finally ended with a loss of 263 points at 18,675.

Among the Sensex stocks, Bharat Heavy Electricals Ltd slumped nearly seven per cent to Rs 245. Wipro and Hindalco Industries tumbled six per cent each to Rs 352 and Rs 118, respectively. Infosys, Reliance Industries, State Bank of India and Tata Motors were the other major losers. On the other hand, Sun Pharma soared five per cent to Rs 715. ITC, Tata Steel and Sterlite Industries were the other prominent gainers.

As per the monthly Fibonacci chart, the Sensex recently has slipped below its near support level of 18,750, hence may now test lower levels of 18,400 to 18,150-odd levels. On the upside, in case the index sustains above 18,750, we could see the index rally back above the 19,000-mark.

Next week, the Sensex is likely to seek support around 18,530-18,435, while face resistance around 18,825-18,915.

The NSE Nifty swung in a range of over 115 points. The index from a high of 5,751 slipped to a low of 5,637, and finally settled with a loss of 71 points at 5,676.

Currently, the Nifty is testing support around its short-term (20-day) daily moving average on the daily charts, around 5,660-odd level. As long as the index maintains above this on a closing basis, the index could bounce back to 5,800-odd levels. On the flip side, a breakout below its short-term moving average could see the index slip to 5,525-odd levels.

The weekly charts indicate strong support for the index around 5,535-odd levels. The price and moving averages price action remain positive for the 18th straight week.

However, the momentum oscillators are in conflicting mode, while momentum seems to be in favour of the bulls on the weekly charts, select indicators have turned negative on the daily charts. Hence, one can expect a two-way movement next week.

Next week, the Nifty may seek support around 5,630-5,605, while face resistance around 5,720-5,750.