Corporate India awaits Make or Break Budget 2013-14 - Angel Broking

Trading for the week started off on a flat note considering quiet trading mood across the globe. First half of the week belonged to the bulls as we witnessed decent bounce and indices precisely tested the mentioned '20-day EMA' level of 19723 / 5970. However, this level acted as a strong resistance for the market. As a result, we witnessed a sharp fall during the second half of the week. This was mainly on the back of negativity seen in major global markets coupled with sharp depreciation of the Rupee against the Dollar. All these developments during the week resulted in a closing marginally below last week's low of 19381 / 5853.

During the week, the Realty, IT, Oil & Gas and Health Care counters supported the market, whereas the Metal, Auto, FMCG and Banking counters corrected significantly during the latter part of the week. The Sensex and the Nifty closed the week with a very nominal loss of 0.09% and 0.27%, respectively. However, individual Mid-cap and Small-cap stocks continued to fall and closed with significant losses.

Despite a decent up move in the first half, eventually the week turned out in the favor of the bears. Indices faced tremendous selling pressure near the resistance of the '20-day EMA' placed around 19723 / 5970. Further, a strong fall in Thursday's session has resulted in a breakdown from the 'Upward Sloping Trend Line' drawn by joining two significant recent swing lows of 19149 / 5823 (December 18, 2012) and 19381 / 5853 (February 15, 2013). In Nifty, the prices have marginally traversed the trend line; whereas in Sensex, the prices have convincingly closed below the trend line level. Going forward, 19149 / 5823 may act as a crucial support for our market.

Any sustainable move below this level would certainly trigger immense pessimism in the market. In this scenario, indices may slide towards 18973 - 18600 / 5777 - 5650 levels. On the upside, the weekly high of 19742 / 5971 would act as a resistance in the coming trading sessions. Only a move beyond this level may nullify the impact of negative technical evidences. In this case, indices may then rally towards 19768 - 19865 / 5991 - 6025 levels.

The coming week is likely to trade with high volatility on account of February month derivative expiry and announcement of Union Budget. Thus, we advise traders to trade with strict stop losses.

Source : Equity Bulls

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