Bulls successfully defend 5600 mark - Bounce on cards - Angel Broking

The opening session of the expiry week started off on a quiet note in-line with mixed global cues. Indices then showed some early signs of bounce back but strong selling pressure resulted in sizeable intraday correction of nearly one-and-half% from the day's high. However, indices managed to hold their strong support zone of '200-day SMA' and 'Downward Sloping Trend Line' for the day and the rest of the week as well.

On Thursday, the volatility was seen on the back of Derivative expiry. In this process, indices soared during the latter part of the session to end the week well above the mentioned support levels.

During the week, Consumer Durable, Banking and Metal sectors defended our benchmark indices; whereas Capital Goods, Auto and Oil & Banking counters remained under pressure throughout the week. The Sensex and the Nifty ended the week with a very nominal gain of 0.53% and 0.55%, respectively.

The '20-day EMA' and the '20-week EMA' are placed at 19094 / 5766 and 19161 / 5801 levels, respectively. The '200 Day SMA' is placed at 18556 / 5627. The 'Lower Top Lower Bottom' formation on weekly chart is still intact.

We are witnessing a 'Downward Sloping' trend line support drawn by joining the lows of December 18, 2011 and March 04, 2013. The daily momentum oscillators viz, the 'RSI' and 'Stochastic' are signaling a positive crossover.

This week, we witnessed a very narrow trading range for the benchmark indices. As mentioned in our earlier report, the 'Downward Sloping Trend Line' and '200-day SMA' provided decent support to our benchmark indices. Despite a couple of decent attempts, the bears were unsuccessful in violating the strong support level of 18525 / 5600. In fact, indices managed to bounce sharply during the last hour of the week to register a weekly close marginally in the positive territory. We are now observing that the daily 'RSI' and 'Stochastic' oscillators have signaled a positive crossover. Hence, a move beyond Thursday's high of 18883 / 5693 may push indices higher to test next resistance levels of 19094 - 19210 / 5766 - 5820. On the flipside, we maintain our view that only a sustainable move below 18525 / 5600 would justify a bear case scenario and may drag indices lower to test 18255 - 17800 / 5548 - 5441 levels.

Source : Equity Bulls

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