Weekly Technical Analysis

The Sensex began the week with a bang (up 735 points on Monday) and rallied past the magical 20,000 landmark. Though the index crossed the 20,000 mark on four of the five trading days and touched an all-time intra-day high of 20,238, it was unable to close above the psychological mark even once.

Profit-taking in intra-day trades saw the index shed 982 points from the peak to a low of 19,256. The Sensex, however, ended with a gain of 733 points at 19,976.

Though the undercurrent remains bullish, the Sensex may consolidate during this week before making a fresh upmove.

If the index breaks 19,500 on the downside, it may slip to 18,660. On the upside, the index is likely to face resistance around the 20,500-mark.

The Sensex is likely to face resistance around 20,350-20,470-20,585 this week and in case of a downside, the support would be around 19,600-19,485-19,370.

The key levels for the Sensex this month are around 21,000-21,385-21,755 on the upside and 18,660-18,290-17,920 on the downside.

The NSE Nifty crossed the 6000 mark, helped by the 25 bps Fed rate cut. After a near 300 points swing, from a high of 6012 to a low of 5714, the index settled at a record 5932, up 230 points for the week.

The Nifty may target 6270-6500 on the upside this month. On the downside, the index has a strong support at 5675, below which it could slip to 5400.

The Nifty moving average convergence divergence (MACD) is bullish since it is trading above its signal line. The MACD is calculated by subtracting the 26-day exponential moving average (EMA) from the 12-day EMA. A nine-day EMA of the MACD, called the “signal line”, functions as a trigger for buy and sell signals.

The Nifty 9-day Relative Strength Index (RSI) is at 72, which is slightly overbought. A RSI value of over 70 is said to be overbought, while a value of less than 30 indicates an oversold position.