Weekly Technical Analysis

Resistance Around 4534

Nifty — The index traded positive on the opening session of the week. It consolidated toward the opening sessions of the week and saw a rise toward 4548 toward the later part of the week. It ended the week up 45 points.

Momentum Oscillators — On the daily chart, MACD is in buy mode and has moved into positive territory. RSI (14) – Relative Strength Index is exhibiting a reading of 60.62 (reading above 70 signifies overbought). Stochastic (5,3) is in the overbought zone and in sell mode. Momentum oscillators suggest the index can consolidate at current levels.

Moving Averages — The 50 dma = 4397, 20 dma = 4321, 10 dma = 4432. Index has closed above the averages; intra-week declines should find support around the 50 dma levels around 4397. The key support for the week’s trading will be around the 50 dma; only a close below 4397 could see the index decline toward 4300 levels.

Resistance — The index faces resistance around 4534 (high of 31 July 2007). A close above the 4534 level with rise in volumes can see the index test the recent high around 4648. Until the index maintains below 4534 on a closing basis, consolidation can be expected.

Support — The index has support around the 10 dma and 50 dma in the 4432- 4397 band. Decline during the week's trading should find support around these levels.

Conclusion — Expect consolidation with support around 4397; close above 4534 will see the index exhibit strength during the week’s trading