Market may hit new highs

The markets witnessed a smart rally last week with the benchmark indices, the Sensex and Nifty, surging 5.5 per cent each.

The Sensex began the week with a bang on Monday by rising 691 points, and thereafter rallied past the 20,000 mark to touch a high of 20,324. It finally ended with a gain of 5.5 per cent (1,044 points) at 20,207.

The index seems poised to test new highs, technically. However, unfavourable external events may trip the current upmove.

The Sensex may face resistance around 20,595-20,715-20,835 this week, while it may find support around 19,820-19,700-19,575 on the
downside.

The Nifty rallied to a high of 6,111 before settling with a gain of 5.4 per cent (313 points) at 6,080.

The moving average convergence divergence (MACD) crossed the signal line, which indicates bullishness.

The Nifty’s short-term (20 days) moving average is 5,928 and the mid-term (50 days) moving average is 5,786. These should act as support levels in case of a decline.

The Nifty is on firm ground and is likely to gain momentum above 6,150. Its support and resistance levels are placed at 5,950-5,910-5,870 and 6,210-6,250-6,290 respectively.

The weekly support and resistance levels are fibonacci retracement levels of the previous week’s movement, viz 38 per cent, 50 per cent and 62 per cent respectively.