As we are heading towards the end of the year 2010, it seems we are headed for interesting times. Two probabilities can be seen from the current levels. According to the monthly fibonacci calculations, the Sensex low for the month at 19,075 seems to be done for now. While the high of 20,218 is likely to be re-tested, we could see the index jump from 20,345-20,600 by the year-end.
However, the weekly chart shows fear for investors, as the index has been taking support around its short-term (20-week) moving average for the last four weeks. If the Sensex closes below 19,470 during the week, we could see heavy bear pressure, with a possibility of the index falling to 18,300-odd levels.
The National Stock Exchange Nifty struggled around its short-term moving average throughout the week, and eventually managed to close higher than it’s short-term (20-day) moving average on two occasions on the daily chart. The Nifty, too, has somehow held on its short-term (20-week) moving average, which is currently at 5,850, a break of the same could spell trouble for the markets.
On the positive front, the Nifty has formed a hammer pattern on both daily and weekly charts, which indicates that the bulls are strengthening. Hence, a possibility of an upside is higher than that of a downward move.
The daily chart also indicates congestion in the 6,030-6,060 range. So, the Nifty will have to break past this range for a clear cut direction. Till then, we may continue to see range-bound movement.
The markets traded with a positive bias in the holiday-shortened week. Positive global news flow, higher advance tax numbers, and finally, a status quo policy from the Reserve Bank of India, helped the markets sign off the week on a winning note.
The markets, although volatile, moved in an extremely thin range. The Bombay Stock Exchange benchmark index, or Sensex, registered both a higher low and a lower high on weekly charts. The Sensex touched a high of 19,897, and a low of 19,321, and finally settled with a gain of 356 points at 19,865.
SOME VIEWS:
BONANZA PORTFOLIO: “The market is expected to remain volatile. The long term trend is up. The market is expected to consolidate around current levels.”
CANARA BANK OF SECURITIES (CANMONEY): Technically, after Wednesday`s dull show, Nifty exhibited a good show onThursday and closed above the vital sentimental resistance level of 5,900. Nifty has tested the lower support of 5,860-65 range and witnessed a good rebound from those levels. Owing to good buying in mainline stocks on account of supportive RBI announcement and firm opening of European indices, Nifty managed to close above its 9, 14 and 100 day`s SMA level placed at 5,910; 5,917 and 5,846 levels but closed below 50 day`s SMA placed at 6,033; these levels may act as new ranges, in coming sessions. VIX for the day closed at considerably optimum level of 20.24% and indicating little lesser volatility in market in the forthcoming sessions. RSI (14) for the day was at 49.79 levels and MACD was below the signal line, thus combined together they are giving the signals that market is likely to trade sideways or take a breather for some time.
SOME VIEWS:
BONANZA PORTFOLIO: “The market is expected to remain volatile. The long term trend is up. The market is expected to consolidate around current levels.”
CANARA BANK OF SECURITIES (CANMONEY): Technically, after Wednesday`s dull show, Nifty exhibited a good show onThursday and closed above the vital sentimental resistance level of 5,900. Nifty has tested the lower support of 5,860-65 range and witnessed a good rebound from those levels. Owing to good buying in mainline stocks on account of supportive RBI announcement and firm opening of European indices, Nifty managed to close above its 9, 14 and 100 day`s SMA level placed at 5,910; 5,917 and 5,846 levels but closed below 50 day`s SMA placed at 6,033; these levels may act as new ranges, in coming sessions. VIX for the day closed at considerably optimum level of 20.24% and indicating little lesser volatility in market in the forthcoming sessions. RSI (14) for the day was at 49.79 levels and MACD was below the signal line, thus combined together they are giving the signals that market is likely to trade sideways or take a breather for some time.
