Wkly Tech Analysis: Nifty's gains may be capped around 5,200

The markets witnessed whip-saw trading this week, as they reacted to overnight global cues. The Sensex registered the week's high and low in the early part of the week, and, thereafter, swung within the range. It touched a high of 17,189, and a low of 16,669, before settling with a loss of 1.7 per cent (297 points) at 16,785.

Given the positive overseas cues, once again the markets are likely to see a gap-up opening. But the momentum oscillators indicate the gains may be capped, as the moving average convergence/ divergence seems to be tiring out and the stochastic slow has given a negative signal.

According to the monthly fibonacci charts, the Sensex has given a buy signal on the monthly charts. The bias will remain positive for the month as long as the index remains above 16,450. On the higher side, the momentum will remain in favour of bulls above the 17,000-mark.

However, the Sensex is yet to give a positive breakout on the quarterly charts. The index will have to cross the 17,200-level for a sustained up move for the rest of the year. As and when it breaks the 17,200-barrier, the index can rally to 17,700 or further to 18,500.

The NSE Nifty moved in a range of 126 points, from a high of 5,160, the index dropped to a low of 5,011, and eventually ended with a loss of 1.6 per cent (82 points) at 5,050.

The Nifty once again dropped back, after facing resistance around 5,160. Further, it was not able to close above its short-term weekly moving average, which is at 5,105. Failure to cross it could spell trouble going ahead. In case the index breaks below 4,980, then we could re-test 4,725, and, also, a further fall to 4,600-odd levels seems possible.

On the positive front, if the Nifty is able to close above 5,105, then we could see a fresh up side. The next major hurdle for it could be around the higher end of the bollinger band, which indicates resistance around 5,210. A break above 5,210 can see the index flare up to 5,400-5,450.