Weekly Technicals - Overbought!

Nifty — The index closed on a strong note on the opening session of the week, after which the rally continued throughout the week’s trading. It ended the week with gains of 183 points.

Momentum Oscillators — On the daily chart, MACD is in buy mode. RSI (14) – Relative Strength Index is exhibiting a reading of 82.55 (reading above 70 signifies overbought). Stochastic (5,3) is in overbought zone and in sell mode; it is showing signs of negative divergence. Momentum oscillators are showing overbought reading on daily charts; the index could decline from current levels during the week's trading.

Moving Averages — The 50 dma = 4485, 20 dma = 4660, 10 dma = 4819. The index is trading above the averages. Rising moving averages act as support during declines; support can be expected around the 10 dma at 4819 during the week’s trading.

Support — The index has support around 4930 (low of 26 September 2007), break of support around 4930 could see index decline toward 4800 levels during the current week’s trading.

Higher Levels — The index can test higher levels around 5076.

Conclusion — Index can test higher levels around 5076; support is around 4930, break of which could see index decline during the current week’s trading.