For the third consecutive week, the markets ended in the red, owing to heavy selling and fresh weakness in the rupee against the dollar. The Sensex touched a low of 18,551, ending at 18,789, a loss of two per cent. In the last three weeks, the index has slumped 6.7 per cent.
Among the Sensex-30 stocks, BHEL slumped 21 per cent to Rs 118. Sun Pharma, Tata Power and HDFC fell eight per cent each, while Bajaj Auto, Larsen & Toubro and Tata Motors lost four-six per cent each. Jindal Steel soared 11 per cent to Rs 207, while Tata Steel rose eight per cent to Rs 218. NTPC, Sterlite, Coal India and Hindalco rallied about five per cent each.
According to the monthly Fibonacci charts, the Sensex has given a 'sell' signal. For the rest of the month, the overall bias is likely to remain negative, as long as the index sustains below 18,900-19,080 levels. Sustained trade below 18,585-odd levels would favour the bears. The 18,500-level is significant support, according to the quarterly and yearly Fibonacci charts. According to the weekly Fibonacci charts, the Sensex is likely to seek support at 18,500-18,320 next week; on the upside, it might face resistance at 19,080-19,255.
From an early week high of 5,721, the National Stock Exchange Nifty slumped to a low of 5,487, ended at 5,566, a loss of 112 points. The Nifty is trading closer to its important support level of 5,475. The head-and-shoulders pattern on the weekly charts indicates crucial support at 5,475. In case the index breaks below the 5,475-5,440 support range, we could witness a steep fall towards the 5,100-mark.
Select momentum oscillators are in oversold territory on the daily charts. Therefore, the index may pull back to 5,650-5,750 levels, provided the Nifty sustains above 5,520.
However, as key momentum oscillators have shown a negative divergence on the weekly charts, any up-move from current levels is likely to be short-lived. The index has some support at the 5,475-5,440 range, which is the lower end of the Bollinger Band on the weekly charts and the 200-weekly moving average.
To sum up, the bias for the rest of the month is likely to remain negative as long as the Sensex sustains below 19,080. Near support for the Sensex is at around 18,500. The Nifty has crucial support at 5,475-5,440, below which we may witness a steep slide to 5,100-odd levels. On the upside, the index might bounce back to 5,650-5,750.