Nifty registers biggest weekly loss of 2013 - ICICIdirect

The Nifty registered one of its biggest weekly loss of the calendar year 2013 dragged down by a risk-off sentiment following political uncertainty and weak global cues.

The weekly price action formed the largest bear candle in recent months, which closed below the early March low of 5663, thus forming a lower high and lower low on the weekly time frame.

The Nifty broke below its immediate support of 5800 odd levels early during the week and continued to slide thereafter. The index is now placed precariously above its 200 day SMA currently at 5618. After a six-day fall, which wiped out nearly 300 points on the index, some supportive efforts to hold the 200 day SMA may not be ruled out in the coming week.

The oversold nature of intraday momentum oscillators may also provide some cushion in the coming sessions. Therefore, some sideways consolidation of temporary pullback attempts may not be ruled out near the 200 SMA (5618).

Volatility is expect to remain elevated in the upcoming truncated week of trade with the market open for just three trading sessions and the F&O expiry due on Thursday.

We would be closely watching the market breadth in order to gauge the reliability of pullback attempts in the short-term. Lack of broader market participation will see the index face stiff resistance around the 5760-5800 area and react lower to eventually head towards 5550-5500.

The November 2012 low at 5548 and the upper band of the major rising gap area (5526-5447) formed in mid-September 2012 at 5526 makes the 5550-5500 region a crucial support to watch out in the short-term.

For the coming week, the Nifty has resistance at 5760, 5810 levels whereas supports are placed at 5618, 5550 levels.

Source : Equity Bulls

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