Wkly Tech: Bias changes to positive

After a smart rally last week, the markets may consolidate this week ahead of a likely fresh upmove. Last week, the Sensex surged over 6 per cent (894 points) to 15,318. In a matter of less than two weeks, the index has gained over 1,500 points.

However, on a monthly basis, the Sensex ended lower by 232 points after five consecutive positive months.

On the positive front, the index not only managed to hold above its yearly support level of 13,780 for the second week, but also crossed some important resistance around 14,650-14,935, following which the short-term bias has now changed to bullishness. The 14,650-14,935 range is now likely to act as a support for the index in case of a downmove. If the index crosses 15,500, it is likely to test new highs in the near term. This month, the index may move in a broad range of 14,200-16,000.

This week, the Sensex may face resistance around 15,615-15,700-15,800, while in case of a downside, the index is likely to find support around 15,025-14,935-14,840. The Nifty surged to a high of 4,471, before settling with a gain of 274 points at 4,464. For the month, the index was down 65 points.

The Nifty, too, managed to cross some important levels of 4,250-4,315 on its way up last week. Going forward, these levels are now likely to act as a support for the index. The Nifty is likely to face resistance around 4,570-4,600-4,635 during the week ahead, while on the downside, the index may find support around 4,355-4,325-4,290.

The Nifty is currently trading above its mid-term (50 days) and short-term (20 days) moving averages, which is a positive sign. The mid-term moving average is currently at 4,374, and the short-term moving average is at 4,296.