Weekly Technical Analysis

Nifty — The index closed positive on the opening session of the week; mid-week it consolidated in a trading band and closed on a strong note toward the closing session of the week. It ended the week with gains of 154 points.

Moving Averages — The 50 dma = 5523, 20 dma = 5733, 10 dma = 5681. The index has closed above the averages, which should be considered positive. Declines during the current week’s trading should find support around the averages.

Consolidation — Last week the index consolidated in a narrow band of 5596-5773; it has closed around the upper end of its consolidation band suggesting strength. Breakout above 5773 should see index test higher levels around 5950 levels.

Momentum Oscillators — On the daily chart, MACD is in sell mode but around the zero line. RSI (14) – Relative Strength Index is exhibiting a reading of 55.14 (reading above 70 signifies overbought and reading below 30 signifies oversold).

Support — The index has support around the lower end of the consolidation band around 5596; intra-week declines should find support around these levels. Lower support is around the 50 dma = 5523 levels.

Resistance — The index faces resistance around the upper end of the consolidation band around 5773; breakout above the 5773 level will see the index rally toward 5950. Higher resistance is around 6012 (high of 1 November 2007).

Conclusion — Breakout above 5773 should see the index test higher levels around 5950 during the week’s trading.