The markets ended lower for the second consecutive week, amid concern over the pace of economic growth and a drastic fall in the rupee. However, the Sensex recovered some of the losses on Friday, owing to hopes of a rate cut by the Reserve Bank of India. The Sensex, which tumbled to a low of 18,765, ended the week at 19,180, a loss of 249 points.
Among the Sensex 30 stocks, Jindal Steel slumped 13 per cent to Rs 243, while Tata Power tumbled nine per cent to Rs 81. Bhel, Sterlite, Tata Steel, Coal India and Sun Pharma were the other major losers, losing six to seven per cent each. Reliance surged about four per cent to Rs 814. Hindalco, NTPC and Larsen & Toubro were the other prominent gainers, rising two to three per cent each.
According to the monthly Fibonacci charts, the Sensex, after giving a 'sell' signal mid-week, managed to close above 19,070. For the rest of the month, 19,070 remains a critical level, as a break and close below this could trigger a slide to 18,200-odd levels. On the positive side, the Sensex has to scale past 19,450 for fresh strength.
During the week, the National Stock Exchange Nifty tumbled below its 200-day daily moving average, but soon bounced back above it. On Friday, the index witnessed a gap-up, and the level of 5,740 remains a major hope area for the markets.
Though in oversold territory, key momentum oscillators for the Nifty are still in favour of the bears. Therefore, one may see limited upside in the current pull-back, with strong resistance likely at 5,900-odd levels.
The weekly charts indicate failure to sustain at above 5,860 could be the warning sign of an impending fall. This time, the fall could be sharper and bigger, towards 5,500-odd levels.
The weekly moving average convergence-divergence and the Stochastic Slow are clearly in favour of the bears. Near-support for the Nifty is at 5,740-5,710.
To sum up, the key support for the Sensex is 19,070, while the hurdle is 19,450. Fresh strength could be expected only on sustained trade at above 19,450. To negate the recent fall, the Nifty has to sustain at above 5,860. Failure to do so could trigger a sharp fall to 5,500-odd levels in the next few weeks.