By Rex Cano
The markets have started the year on a promising note, recording gains in all the four trading sessions so far. The Sensex, which started the week on a tepid note, rallied to a fresh two-year high of 19,797, finally ending at 19,784, a gain of 339 points.
Among the Sensex-30 stocks, ONGC was the major gainer, rising about seven per cent to Rs 285, while BHEL surged 6.6 per cent to Rs 242. Gail India, SBI, Dr.Reddy's, ICICI Bank, Bajaj Auto, Wipro and Maruti Suzuki were the other major gainers. At Rs 282, ITC shed 2.3 per cent. Hero MotoCorp and Sun Pharma were the other notable losers, down 0.5 per cent each.
According to the monthly Fibonacci charts, the Sensex has given a buy' signal. As long as the index sustains at above 19,600, the bias is likely to remain bullish. On the upside, the index could rally to 19,940-odd levels, above which the next target is 20,100. On the flip side, in case the Sensex breaks below 19,600, we could see a fresh correction in the markets; the index could then slide to 19,250-odd levels.
The Sensex may face resistance at 19,940-20,025, while it may seek support at 19,635-19,540.
The NSE Nifty moved in a range of 125 points. From a low of 5,897, it rallied past the 6,000-mark after almost two years, touching a high of 6,021. It finally settled at 6,016, a gain of 108 points.
According to the daily charts, the Nifty rallied once it got a positive breakout above 5,940. The bias is likely to remain bullish, as long as the index sustains at above 6,006. The near-term upside target for the index is pegged at 6,050; the medium-term target is 6,150-odd levels. In case, the index trades consistently below 6,006, we could see a short-term correction; the index could slip to 5,930-odd levels. Sustained trade below 5,910-odd levels could trigger a deeper correction to 5,800-odd levels.
The momentum oscillators on the daily charts seem to be tiring out. Hence, the possibility of a correction in the near term seems high. However, on the weekly charts, the momentum oscillators continue to remain in favour of the bulls.
To conclude, 6,006 is the key pivot point in the short-term. On the upside, the index could test 6,050-odd levels, above which the next target is 6,150. On the flip side, in case, the index breaks below 6,006, we could see a short-term correction to 5,930-odd levels, with the possibility of a slide to 5,800-odd levels.