Stocks to watch this week

Sensex may consolidate

The unsuccessful attempt to move past 16,000 last week implies that the Sensex needs to do some more work before it can surpass this level.

The medium-term trend can now be revised to neutral and the index can be expected to consolidate in a range between 13,000 and 16,000 for a few more weeks.

Retracement of the move from March lows gives us the initial medium-term supports at 13,616 and then at 12,963.

In other words, the gap formed in the post-election push should be a strong medium-term support. Weekly close below 12,963 is needed to make the medium-term view overtly negative. The short-term trend has turned lower from the 16,002 peak. Sensex has immediate supports at 14,939 and 14,800.

Short-term investors should, however, exit long positions on a close below 14,800 since the next halt can be at 14,471 or 14,282. Resistances for the week would be 16,002 and 16,217.

Text & images: Business Line

Also see: Weekly review: Trading strategy - Sell all rallies