Wkly Tech Analysis: Nifty still trapped in 5,350-5,500 range

A mid-week correction saw the indices fall below their short-term moving averages in intra-day deals. The bulls, however, managed to regain the advantage, on the back of a sharp rally in banking stocks. The Nifty swung in a range of 120 points. From a high of 5,492, the index slipped to a low of 5,372, but ended the week with a marginal gain of 13 points at 5,452.

The BSE benchmark, the Sensex, touched a high of 18,309, then slipped to a low of 17,915. The index settled with a gain of 23 points at 18,167.

Among Sensex 30 stocks, Tata Motors was the biggest gainer, up nearly 14 per cent at Rs 1,017, on the back of strong Q1 results. SBI rallied sharply to a fresh all-time and was up almost nine per cent at Rs 2,620.

Going back to the Nifty charts, the index is treading cautiously along its short-term (20-days) moving average, which is currently at 5,426. On the upside, the index continues to face hurdle as it approaches the 5,500-mark. One needs to exercise caution at currently levels, as if the Nifty happens to break 5,350, it may very well slip to 5,250 next week.

The momentum indicators are quite mixed, with MACD turning negative on the daily charts, while remaining positive on the weekly charts. The directional index on weekly charts indicates a tired bias of the current sideways movement, which indicates that a breakout is likely to happen sooner than later. Further, monthly charts indicate a bullish stance. The low of 5,350 should be held, and the probability of the index crossing 5,500 remains high.