The bias for the Sensex is likely to remain bearish as long as the index sustains below 18,900-odd levels. On the downside, the index could slide to 17,300-odd levels
The markets witnessed choppy trade during the week, with the India Vix soaring to new highs. The Sensex opened at the week's high of 18,587, before falling to a low of 17,760. It revisited the 18,500-mark thrice during the week and ended at 18,519, a loss of 79 points.
According to the monthly Fibonacci charts, the Sensex has given a ‘sell’ signal. Therefore, the overall bias is likely to remain bearish as long as the index sustains below 18,900-odd levels.
The BSE index has also given a ‘sell’ signal on the quarterly charts. The quarterly bias, too, is likely to remain bearish as long as the index sustains below 18,900.
On the downside, the Sensex is likely to test its yearly S-2 (support) at 17,300-odd levels. Below this, the next major support is at 15,200-odd levels.
According to the weekly Fibonacci charts, the Sensex is likely to seek support at 18,200-18,000 next week; on the upside, it might face resistance at 18,835-19,030.
The National Stock Exchange Nifty ended the week at 5,472, a loss of 0.7 per cent. The index tumbled sharply below the 200-weekly moving average during the week, recording a low of 5,254. On the weekly charts, the Nifty has seen the formation of a ‘bullish hammer’.
For confirmation of the bullish movement, the index needs to end the following week on a stronger note.
However, key momentum oscillators such as the Average Directional Index and the Stochastic Slow are in favour of the bears. Therefore, the up-move may not be sustainable.
On the upside, the Nifty could surge to 5,600-odd levels, while sustained trade below 5,440 could trigger a fresh round of selling.
To sum up, the bias for the Sensex is likely to remain bearish as long as the index sustains below 18,900-odd levels.
On the downside, the index could slide to 17,300-odd levels. Similarly, the Nifty might face resistance at around 5,600 and it could weaken on sustained trade below 5,440.
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