The markets continue to surprise every now and then, as they did last week by posting a record single-day (up 894 points) gain. After starting the week on a negative note, the Sensex rebounded sharply from the week's low of 18,333, and rallied to a high of 19,988 - a whopping 1,655-point gain. The index eventually ended the week with a gain of 791 points at 19,698.
There are mixed signals as far as the market direction is concerned, with the negatives outnumbering positives. On the positive front, the index low of 18,333 is close to the monthly support level (S2 = 18,290). If the index is able to hold this support and trade consistently above the 19,840 level, it may rally to new highs.
On the negative front, the index has been making lower tops and lower bottoms in the last three weeks. For the week ended November 2, the high on the Sensex was 20,238 and low was 19,256. In the following week, the index touched a high of 20,009 and a low of 18,737. Last week, the index touched a high of 19,988 and a low of 18,333.
If the index consistently trades below the 19,500 mark, 18,660 would be a crucial level to watch out for, below which the index is likely to dip to 17,000/17,300 levels. The bulls would continue to hold the upper hand as long as the index stays above the 17,000 mark.
The 14-day RSI (relative strength index) is close to 30 levels. A RSI of 30 or less 30 indicates an oversold situation.
The Sensex is likely to face resistance around 20,330-20,525-20,725 this week, while it will find support around 19,065-18,870-18,670.
There are mixed signals as far as the market direction is concerned, with the negatives outnumbering positives. On the positive front, the index low of 18,333 is close to the monthly support level (S2 = 18,290). If the index is able to hold this support and trade consistently above the 19,840 level, it may rally to new highs.
On the negative front, the index has been making lower tops and lower bottoms in the last three weeks. For the week ended November 2, the high on the Sensex was 20,238 and low was 19,256. In the following week, the index touched a high of 20,009 and a low of 18,737. Last week, the index touched a high of 19,988 and a low of 18,333.
If the index consistently trades below the 19,500 mark, 18,660 would be a crucial level to watch out for, below which the index is likely to dip to 17,000/17,300 levels. The bulls would continue to hold the upper hand as long as the index stays above the 17,000 mark.
The 14-day RSI (relative strength index) is close to 30 levels. A RSI of 30 or less 30 indicates an oversold situation.
The Sensex is likely to face resistance around 20,330-20,525-20,725 this week, while it will find support around 19,065-18,870-18,670.
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