Wkly Tech Analysis: Nifty unlikely to cross 5,700 soon

The markets, as expected, did face some resistance around 18,500, and also did retrace a bit in the first two days of the week. However, expiry related short-covering coupled with fresh buying saw the Sensex rally past the hurdle to a high of 19,031. The BSE benchmark index eventually ended with a gain of nearly three per cent (522 points) at 18,763.

Among the index stocks, Hindalco soared nearly eight per cent to Rs 186. Sterlite Industries, SBI, BHEL, HDFC, HDFC Bank, TCS, Reliance Communication, Tata Steel, Larsen & Toubro and Hindustan Unilever gained four-six per cent each. On the other hand, Bharti Airtel was down two per cent followed by Reliance Industries and Wipro which were the only losers among the Sensex components.

The Sensex may now move in a new trading band, with resistance around 19,000-19,150 on the higher side, and considerable support around 18,340. May be, by the end of the next week, we could get a better picture of the likely trend.

The NSE Nifty moved in a range of 272 points, from a low of 5,434 the index recovered and rallied to a high of 5,706, and finally ended with a gain of 156 points at 5,627.

The Nifty has retraced more than 61.8 per cent of the April to June fall. The retracement point is 5,660, hence the index is likely to face considerable resistance around 5,660-5,700 (medium-term resistance point) for now. It seems unlikely the index may cross the 5,700 in a hurry. The up-move, if stretches, could face another hurdle around 5,750 - which happens to be the long-term (200-day) Daily Moving Average.

On the downside, the index is likely to find considerable support around 5,460 levels. The bias in the short-term will continue to remain positive as long as the index sustains above 5,460.

Next week, the Nifty is likely to face resistance around 5,730-5,760-5,800, and on the downside it will seek support around 5,525-5,490-5,460. For July, the resistance is placed around 5,825-5,935, and the support is expected around 5,470-5,360.