Sensex and Nifty close the week with gains of 1.42% and 1.53% respectively - Angel Broking

The week started off on a flat note, in-line with mixed global cues. During the opening session of the week, the domestic bellwether indices, the Sensex and the Nifty, posted a weekly low of 18989 / 5789, but then recovered to move higher over the rest of the session. In Tuesday's session, the bears made a valiant attempt to break the previous day's low, a couple of times, but eventually failed to do so. Even in Thursday's session, the bears were unable to gain an edge in the market; on the contrary the Nifty closed well above the psychological level of 5900 on the back of a smart recovery towards the fag end of the derivative expiry session. The start of the May series has not been in the favor of the bulls as indices remained under pressure for the whole of Friday's trading session. The Auto, Banking, Capital Goods and Consumer Durables counters contributed heavily in the concluded week's up move; whereas the IT and Teck counters continued to add pressure on the benchmark indices. The Sensex and the Nifty posted a decent gain of 1.42% and 1.53%, respectively, over the previous week's closing.

- The '20-week EMA' and the '20-day EMA' are placed at 19038/ 5767 and 18902/ 5730 levels, respectively.

- The '89-day EMA' and the '200-day SMA' are placed at 19063/ 5773 and 18710 / 5673, respectively.

- The 'Lower Top - Lower Bottom' formation on the weekly chart is still intact.

- The weekly momentum oscillators, ADX (9) indicator and '3 & 8 EMA' are signaling a positive crossover.

- The 61.80% and 78.60%Fibonacci retracement levels of the fall from 20204 / 6112 to 18144 / 5477 are placed at 19416 / 5870 and 19762 / 5976, respectively.

The benchmark Indices have moved well during the week and have now tested the 61.80% Fibonacci retracement level (19416 / 5870) of the fall from 20204 / 6112 to 18144 / 5477. On the weekly chart, we are observing that the momentum oscillators. ADX (9) indicators and '3 & 8 EMA' are positively poised. Any sustainable move beyond this week's high of 19435 / 5925 would in turn push the indices towards the 78.60% Fibonacci retracement level placed at 19762 / 5976.

On the flipside, the price action seen in the last trading session of the week can be termed as an 'Inside Day' pattern. This candlestick formation occurs when the entire price range of a given day falls within the price range of the previous day. The pattern is often used to signal the indecisiveness because neither the bulls nor the bears are able to send the price beyond the range of the previous day. The said pattern will be confirmed below Thursday's low of 19192 / 5853. This is also supported by the negative placement of daily 'Stochastic' oscillator. Hence, any sustainable move below 19192 / 5853 would result in a near term loss of optimism. In this scenario, indices may correct towards 18941 / 5760 and 18790 / 5710, which are 38.20% and 50% Fibonacci retracement levels of the rise from 18144 / 5495 to 19435 / 5925, respectively.

Source : Equity Bulls

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