Wkly Tech Analysis: Weakness likely in second half of the week

The markets, as expected, crossed the 18,000-mark during the week, all due to a solid start. Despite Thursday’s weakness, the markets were able to extend gains for the ninth straight week.

The Sensex touched a high of 18,048 in the middle of the week. Thereafter, it corrected and ended with a gain of 241 points at 17,933. In the process, the index gained 12.7 per cent (2,017 points) at 17,933.

This week, Reliance Infrastructure was the major gainer - the stock surged 8.5 per cent to Rs 1,102, and DLF rallied 7.5 per cent to Rs 334. BHEL, Hero Honda, Reliance Communications, Tata Motors, Tata Steel and Sterlite surged 4-6 per cent each. On the other hand, Hindustan Unilever dropped over 4 per cent to Rs 221. Hindalco, TCS, ONGC and Sun Pharma declined 2-3 per cent each.

Going by the current trend, it seems the markets are likely to start the week on a positive note, however, the second half of the week could see selling pressure. The nine-week rally may end this week, if the index is unable to sustain above 18,050.

The momentum indicators on the weekly charts are indicating tiredness, and we may see net losses, albeit marginal, next week. The index is likely to face considerable resistance around 18,075, above which it may spurt up to 18,150. On the downside, the index is likely to find support around 17,790-17,700. A break of 17,700 could trigger significant selling during the week.

The NSE Nifty moved in a range of 109 points, it touched a high of 5,400 and a low of 5,290. The Nifty finally settled with a gain of 71 points at 5,362.

The Nifty is likely to face considerable resistance around 5,432, which is the higher end of the Bollinger band on the weekly charts. The daily chart indicates resistance around 5,407. Bulls should continue to have the upper hand, as long as the index sustains above 5,400. On the negative front, selling pressure may intensify when the index slips below 5,320.