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Nifty to remain bullish above 6,150

Source : BUSINESS_STANDARD
Last Updated: Sat, May 18, 2013 18:40 hrs
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The markets began the week on a dismal note, falling about two per cent on Monday. However, they recovered and rallied to end the week on a high. From a low of 19,653 early in the week, the Sensex scaled a fresh two-and-a-half-year high of 20,328, before settling at 20,286, a gain of 164 points.

In the process, the BSE index rallied 11 per cent (2,044) in the last five weeks.



Among the Sensex 30 stocks, Cipla, ICICI Bank and State Bank of India surged five per cent each to Rs 425, Rs 1,229 and Rs 2,425, respectively. Larsen & Toubro, Hindalco, NTPC, ONGC and HDFC were the other major gainers. ITC slumped 5.5 per cent to Rs 335. Wipro, Bharti Airtel, Tata Steel and Coal India were the other major losers.

According to the monthly Fibonacci charts, the near-term bias for the Sensex is likely to remain positive, as long as the index remains at more than 20,070. On the upside, the index could test 20,420. Sustained trade above 20,420 would trigger a sharp rally. In case the Sensex breaks below 20,070, we could see a drop to 19,850-odd levels.

Next week, the Sensex is likely to move in the range of 19,865 and 20,705, with support expected at 20,030-19,950, and resistance at 20,545-20,625.

The National Stock Exchange (NSE) Nifty moved in a range of 230 points. From a low of 5,970 early in week, the index surged to a high of 6,200, before ending at 6,187, a gain of 80 points.

The short-term trend for the Nifty remains fairly positive. Near support for the index is seen at about 6,150, while near-resistance could be expected at 6,220-odd levels.

For the markets, the beginning of the week is likely to be crucial, as a break and sustained trade below 6,150 could trigger a longer correction.

The price and moving averages action on the daily and the weekly charts are in favour of the bulls. However, key momentum oscillators such as the relative strength index and the Stochastic Slow are in overbought territory, both on the daily and the weekly charts.

To sum up, the short-term trend is likely to remain bullish as long as the Sensex sustains at more than 20,070, and fresh strength above 20,420. The Nifty has near support at 6,150 and resistance at 6,220-odd levels.

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