Preceding week, the Bombay Stock Exchange Sensex opened at 21080, attained a low at 20921 and moved to a high of 291961 before it closed the week at 21920 and thereby showed a net rise of 799 points on a week-to-week basis.
A breakout and close above 21483 was witnessed on the weekly chart which suggests that a near term rally towards 22853 is likely to be seen with volatility. Depending on the speed and momentum on the Sensex, the upside higher target of 22853,-27105-34650 will be tested in due course of time.
For the immediate near to short term, the focus will be on 22853. Weekly support will be at 21600-21240-20920. Weekly resistance will be at 22280-23320.
The monthly candle at February 2014 end was strong. On the monthly chart, the Sensex has formed a Piercing Line candlestick pattern against the January Engulfing bear candlestick pattern. On the monthly chart from a two month perspective, it has been a tug-of-war between the bears and the bulls. The month of January 2014 belonged to the bears whereas February 2014 belonged to the bulls. Now March 2014 offers follow-up rise and bulls have kept the control in the first week of March.
BSE Mid Cap
The recent peak of 6802 will be tested. In the event of a breakout and close above 6803 on the weekly chart will show a rally towards 7177-7392. Weakness can be restored on a close below 6400. The momentary bias is to move higher.
BSE Small Cap
Expect a rise to test 6717. On a further breakout and close above 6720 will lead to a rise towards 7063 at least. Weakness will be seen if the close is below 6400.
A massive weekly rise was seen with gains of 1282 points on the BSE Bankex. Expect 13928 to be tested. In the event of a further rise and weekly close above 13928 will lead to rise towards 15335. Sustainability above 13928 will be crucial after the big rise of 1282 points last week. Correction to 13113-12588 can be used as an opportunity to buy banking stocks. Since the rise was sharp, intra-week correction possibility cannot be ruled out in the uptrend, which has resumed now.
Strategy for the Week
Traders long on index and index related stocks can keep the stop loss at 20900. The low registered last week was 20920. The buy range mentioned last week was 20965-20791. The buy range was tested and the close was higher at 21919, which gave a massive gain and opportunity to profit.
Weaker opening and correction to 21600-21240 can be used for buying with a stop loss of 20900. Expect 22280-23320 to be tested with volatility.
Nifty Weekly Resistance at 6555-6600-6644
Nifty Weekly Pivot at 6422
Nifty Weekly Support at 6377-6333-6288-6244