The markets have recovered smartly, after slipping below the 200-daily moving average in the last two weeks. Now, the Sensex may attempt a pull-back to near-term moving averages.
Among the Sensex 30 stocks, new entrant Sesa Goa soared 22 per cent to Rs 187, while TCS rose 11 per cent to Rs 2,023. Dr.Reddy's, Wipro, Hero MotoCorp and Cipla were the other major gainers, rising five-eight per cent each. ONGC slumped 10 per cent to Rs 249, while Jindal Steel, Coal India, ICICI Bank, Mahindra & Mahindra and Maruti fell four-eight per cent each.
According to the quarterly Fibonacci charts, the Sensex has given a 'sell' signal for this quarter and looks likely to dip towards the yearly S-2 (support-2) of 17,300-odd levels. However, in case the Sensex is able to sustain above 18,500, the current bearish bias could be negated, and the benchmark index could bounce back to about 20,000. The monthly Fibonacci charts indicate the Sensex could swing in a broad range of 17,300-19,935, with interim support at 17,800-17,560. On the upside, the index could face resistance at 19,430-19,680.
Next week, the Sensex is likely to seek support at 18,130-17,980-17,825, while on the upside, it could face resistance at 19,100-19,260-19,415.
The National Stock Exchange Nifty dipped below the 200-weekly moving average in the last two trading weeks, but managed to end above it. Select momentum oscillators such as the 14-day relative strength index and the Stochastic Slow have given a positive divergence on the daily charts. The moving average convergence-divergence, too, is on the verge of a positive breakout. Therefore, the strategy is likely to be 'buy on dips'.
On the downside, the Nifty is likely to find strong support at 5,200-odd levels; on the upside, it could rise to 5,700-odd levels. To sum up, the Sensex might turn positive in case it sustains above 18,500. On the upside, it could surge to about 20,000 this month. The Nifty is likely to get strong support at 5,200-odd levels and could bounce back to 5,700-odd levels on the upside.