Nifty 50 and Sensex have ended the week on a flat note. After sustaining higher and stable for most part of the week, the benchmark indices witnessed a sharp fall on Friday giving back all the gains made during the week. Nifty Bank index tumbled over 2 per cent on Friday and has closed the week in red. However, the fall on Friday has not changed anything on the charts. The overall bullish structure on the charts remains well intact. Although there is room to fall further from here, supports are there to limit the downside. As such any such fall in the near term will be a very good buying opportunity from a long-term perspective.

Among the sectors, barring the BSE Bankex (down 1 per cent) other sectoral indices closed in green last week. The BSE Consumer Durables index outperformed by surging 2.5 per cent. This was followed by the BSE Power and BSE Auto index, up 1.6 and 1.27 per cent respectively.

FPIs Buy

The foreign portfolio investors (FPIs) have begun the month of May on a strong note. They have pumped about $1.32 billion into the Indian equities last week. This is a very positive signal. As we have been mentioning in this column, it looks like the FPIs are buying the dips. So, from the long-term perspective, it is very bullish for the Sensex and Nifty to see new highs in the coming months.

Nifty 50 (18,069)

Nifty opened with a gap-up for the week and rose to a high 18,267.45. However, on Friday, the index fell sharply giving back all the gains. Nifty has closed the week on a flat note at 18,069, up 0.02 per cent.

The week ahead: Inspite of the sharp fall on Friday, Nifty has managed to close above 18,000. This leaves the overall sentiment positive. Strong supports are there at 17,970, 17,900 and 17,800. So, there is limited downside from current levels.

Broadly we expect the index to sustain well above 17,900 itself in case of a fall below 18,000 is seen. Nifty can reverse higher again anywhere from the 18,000-17,900 region. That leg of upmove can take it up towards 18,200 again. This time, the index will have potential to breach 18,200 decisively and rise to 18,500 over the short term.

Nifty will come under pressure only if it breaks below 17,800. Such a break will bring back the danger of seeing 17,500 levels on the downside. However, for now, the chances are looking very less to see the above-mentioned fall.

Medium-term outlook: The broader picture is positive. Strong supports are at 17,700 and 17,500. As long as the Nifty sustains above 17,500 the medium-term outlook is bullish to see 19,000. Intermediate resistance is in the 18,500-18,600 region. A break above 18,600 will clear the way to see 19,000 on the upside. That will also keep the long-term bullish outlook intact to see 20,000-20,500 eventually.

Sensex (61,054.29)

The rise to 61,700 happened last week but did not sustain. Sensex made a high of 61,797.91 on Thursday but fell sharply on Friday giving back all the gains. The index has closed the week marginally lower by 0.1 per cent at 61,054.29.

The week ahead: Immediate support is at 61,000. Below that, 60,800 is the next strong support. 60,500 will be a slightly lower support. But a fall up to 60,500 looks less probable. So, we can expect the downside to be limited either to 61,000 itself or 60,800.

We expect the Sensex to reverse higher again anywhere from the 61,000-60,800 region. That will take the index up to 62,500 in the short term. 

The short-term outlook will turn negative only if Sensex declines below 60,500. That can take the index down to 60,000. But as mentioned above, a break below 60,500 is less probable.

Medium-term outlook: The medium-term outlook is bullish as long as the Sensex trades above the 58,500-58,000 support zone. However, a steep fall to test this support is unlikely at the moment. So, we can expect the Sensex to sustain above 60,500 itself and rise to 63,500-64,000 over the medium term. The long-term outlook is also bullish to see 66,000 on the upside.

Important supports
18,000 – 17,800 on the Nifty
60,800 - 60,500 on the Sensex
42,250– 42,000 on the Nifty Bank
Nifty Bank (42,661.20)

After trading high almost all through the week, the Nifty Bank index witnessed a sharp fall on Friday. That fall wiped out all the gains made during the week. The index made a high of 43,739.80 and tumbled from there to close the week at 42,661.20, down 1.3 per cent.

The immediate outlook is looking weak. Failure to rise back above 43,000 immediately will be negative for the index. In that case we can see a further fall to 42,250 and 42,000 this week. Thereafter we can expect the Nifty Bank index to reverse higher again and rise to 43,000-43,500 in the short term.

From a medium-term perspective, 42,000-41,500 will be a strong support zone. The downside can be limited to 41,500 in case a fall below 42,000 is seen. As long as the Nifty Bank index sustains above 41,500, the bigger picture is bullish to see 45,000-45,500 in the coming months.

Dow Jones (33,674.38)

The Dow Jones Industrial Average was under pressure last week. The index tumbled to a low of 32,937.50 and was threatening for a steep fall. However, on Friday, there was a sharp bounce back which has aided to recover some of the loss. The index has closed at 33,674.38, down 1.24 per cent for the week.

Resistance is at 33,800. A strong rise past this hurdle is needed for the Dow to move up to 34,200-34,300 again. Failure to breach 33,800 can drag the index down to 33,300 and 33,000 again. Broadly, we can expect the Dow Jones to oscillate in a wide range of 32,500-34,500 for some time.

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