After slipping below key support levels in intra-week trade, the markets bounced back smartly. The Sensex dipped below its crucial 18,500-support to touch a low of 18,393, before rallying to a high of 18,794 on buying optimism. It ended the week at 18,755, a gain of 130 points.
Among the Sensex stocks, Wipro soared about nine per cent to Rs 365, while Maruti rose about seven per cent to Rs 1,467. Cipla, Dr.Reddy's, Bajaj Auto, Mahindra & Mahindra, Hindalco and Hero MotoCorp gained four to six per cent each.
The monthly Fibonacci chart indicates the Sensex may swing in a range of 18,050 and 18,970. Key support for the BSE index is expected at 18,220-18,050, while it may see resistance at 18,790-18,970.
However, next week, the Sensex may seek support at 18,600-18,500, while it may face resistance at 18,900-19,000.
Last week, the NSE Nifty moved in a range of 130 points. From a low of 5,583, the index rose to a high of 5,711, ending with a gain of 33 points at 5,698.
The momentum oscillators are in a conflicting mode on the daily and the weekly charts. On the daily charts, the moving average convergence/divergence (MACD) is in favour of the bears, while the 14-day relative strength index (RSI) and the Stochastic Slow have shown a positive divergence.
According to the weekly charts, the MACD is in favour of the bulls, while the Stochastic Slow is in a negative mode. The RSI indicates consolidation.
It seems the markets may see a rise in the early part of the week. Near resistance for the Nifty is expected at about 5,750, while far-off resistance is be expected at about 5,825. On the downside, the index may seek support at about 5,650.
On the weekly charts, the Nifty is comfortably placed above its moving averages. In the worst-case scenario, the index may plunge to 5,450-odd levels, the 20-week moving average.
On the upside, the monthly charts indicate a target of 5,925-odd levels. Next week, the Nifty may seek support at 5,650-5,620, while it may face resistance at 5,745-5,780.