Mkt Outlook: Rally done, time for breather

After five weeks of losses, the major indices - Sensex and Nifty - posted gains last week on the back of renewed buying interest.

The markets began on a positive note, and the Sensex gained as much as 215 points on the first trading day of the week. The index went on to log gains on four trading days and touched a high of 13,387 - up 960 points from a low of 12,427 touched earlier in the week. The index finally settled with a significant gain of nearly 7% (856 points) at 13,286.

Last week, we had mentioned that the bulls have a glimmer of hope, and if the index is able to cross 12,940 then it may rally to 13,800. The index seems to be on course to 13,800 after having crossed 12,940, which now becomes the support level for the index this week.

The overall bias of the market, however, still remains negative, and may change only if the index sustains above the 13,800-mark in the coming days. The Sensex is likely to face resistance around 13,650-13,765-13,880, while the index may find support around 12,920-12,805-12,690.

Similarly, the Nifty from a low of 3603 rallied to a high of 3902 - an intra-week up move of 299 points. The index ended with a gain of 252 points at 3861.

The Nifty is likely to target 3975 this week above which the index could rally to 4010 and 4045. On the downside, the index is likely to find support around 3745 below which the index could drift to 3710 and 3675.