Bulls gun for all time high in Nifty, Sensex - Angel Broking

The week started off slightly lower in-line with mixed global cues. During this session, we witnessed heavy selling pressure in some of the index heavyweights like ITC and eventually resulted in massive intraday fall of more than 2%. This was followed by a narrow trading session on Tuesday, but indices managed to hold around 19650 / 5970 level. On Wednesday, very surprisingly, we witnessed sudden buying interest in our benchmark indices. In the process indices managed to cross '52 week high' of 20204 / 6112. This optimism continued for the remaining part of the week and indices closed at the highest point of the week on the back of a sharp up move towards the latter part of Friday's session. This week's rally was equally dominated by the Banking and the Capital Goods counters; whereas the IT, Capital Goods and FMCG sectors remained under pressure throughout the week. The Sensex and the Nifty gained 0.81% and 1.31%, respectively, over the previous week's closing.

- The '20-week EMA' and the '20-day EMA' are placed at 19291/ 5850 and 19724/ 5993 levels, respectively.

- The '89-day EMA' and the '200-day SMA' are placed at 19300/ 5851 and 18912 / 5735, respectively.

- The weekly 'RSI-Smoothened' oscillator remains positively poised.

Our benchmark indices have maintained their winning streak for the past five weeks. As a result, indices have registered a new '52-week high' on a closing basis. In line with these developments, the Nifty closed above 6100 mark for the first time after December 2010. During Wednesday's session, indices broke out from the 'V' continuation pattern. The said pattern has a bullish implication and at present, projects a theoretical target of 22200 / 6700. The target is computed by adding difference between the low and the high of the pattern, to point of breakout. However, considering the present developments on the ground and the evidence of few other technical parameters, it would be too optimistic to expect such high targets at this juncture. For the coming week, we are of the opinion that indices may move towards the 127% Fibonacci retracement level of the fall from 20204 / 6112 and 18144 / 5477.

This level is at 20750 / 6280 and also coincides with the upper range of the 'Upward Sloping Channel'. In case the present FII buying spree continues, we may even test the all time high of 21207 / 6357. This is also supported by the existing positive placement of weekly 'RSI-Smoothened' oscillator. On the flipside, indices may find decent support around 20147 - 19950 / 6114 - 6085 levels. Traders should make a note that the current positive trend and bullish implication of the 'V' continuation pattern will get violated if the markets trade below the 19652 / 5970 level. For the coming week, we advise traders to adopt a stock specific approach and trade with strict stop losses.

Source : Equity Bulls

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