The markets spent the better half of the week in confused territory, as neither bulls nor bears held the advantage. However, the markets gathered strength towards the end of the week as the benchmark indices broke out of the trading range.
The Sensex had slipped to a low of 19,185 early in the week; the index thereafter staged a recovery amid bouts of volatility. However, reports of likely continuation in stimulus by the US Federal Reserve, coupled with better-than-expected first quarter results by Infosys saw the BSE benchmark index soar to a high of 19,992. The Sensex finally ended the week with a gain of 2.4 per cent (463 points) at 19,958.
Thanks to Friday's rally, Infosys ended the week with a stupendous gain of 14 per cent to Rs 2,803. Sun Pharma, Wipro, Larsen & Toubro, Bharat Heavy Electricals, Tata Consultancy Services, Sterlite Industries and Dr Reddy's surged five-seven per cent each. On the other hand, Mahindra & Mahindra, Maruti and ONGC were the major losers, down over six per cent each.
The BSE benchmark index has given a buy signal on the monthly Fibonacci and quarterly charts.
According to the monthly Fibonacci chart, the Sensex is likely to trade with a positive bias as long as the index sustains above 19,925, below which the index can slip to 19,700. On the upside, the index can surge to 20,100 or further higher to 20,260.
Similarly, the quarterly charts suggest that the bias is likely to remain bullish above 19,900, whereas on the upside, the index can rally to 20,275 or higher to 20,550.
Next week, the Sensex could seek support around 19,650-19,555-19,460, while on the upside can face resistance around 20,265-20,360-20,460. The NSE Nifty reclaimed the 6,000-mark, after a gap of eight trading weeks. The index was up 141 points at 6,009. The bias is likely to remain positive as long as the NSE index sustains above 5,925. On the upside, the index can soar to 6,200.
Select key momentum oscillators such as the Relative Strength Index (RSI) and Stochastic Slow have given a positive divergence on the weekly charts. Similarly, the 14-day RSI and Stochastic Slow are in favour of the bulls on the daily chart as well.
To sum it up, the Nifty looks set for more gains provided the index sustains above 5,925. On the upside, the index can soar to 6,200. Similarly, the Sensex has given a buy signal on the monthly and quarterly Fibonacci charts. The Sensex has near support at 19,900 and far-off support at 19,700.