If the Sensex closes above this level, then the next resistance for the rising Sensex would come at 10,489 points. This level would be a moderate resistance level only and may not offer any significant threat to northward momentum.
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However, if this level also goes, there would be a very important resistance level at 10,744 points. This level would offer very strong resistance to a rising Sensex. It is most likely that there would be good profit-selling around this level, which could well end this leg of rally.
However, if due to strong momentum, this level is crossed, there would be a sharp, short rally, which could help the Sensex steer past 11,000 points.
On its way down, the Sensex might test its first support at 9,789 points. This would be a moderate but important support level for a falling Sensex.
Traders’ cue: The Bombay Stock Exchange. The earnings season will begin next week in a big way, with companies such as Infosys, ITC, Reliance Industries, and ICICI Bank announcing quarterly results. Ashesh Shah / Mint
A close below this level would mean more declines in the coming days amid a weak undertone, which might pull the Sensex down to its next support level at 9,588 points. This level is also a moderate support level and may not be strong enough to restrict the fall.
But a close below this level would be considered a fairly bearish signal, which would mean more declines with the Sensex slipping to 9,171 points for its support.
In terms of the S&P CNX Nifty, on its way up, the first resistance level would come at 3,079 points, which would be a minor level and would be crossed easily.
However, a close above this level would push the next resistance level at 3,118 points. This would be a very important level to watch, as a close above this level would mean a rally which would see the next meaningful resistance coming at 3,230 points. This level might offer very strong resistance to a rising Nifty.
However, a close above this level would mean short, sharp rally.
On its way down, the Nifty would test its first support at 2,991 points. This is a moderate but very critical support level as a close below this would mean a weak undertone and more declines with the next support coming at 2,938 points.
However, if the Nifty closes below this level, then the undertone on the bourses could turn substantially weak, with the next support coming at 2,578 points.
Among individual stocks, HDFC Bank, ICICI Bank and ABB India look good on the charts. HDFC Bank, at its last close of Rs1,015.65, has a target of Rs1,046 and a stop-loss of Rs978. ICICI Bank, at its last close of Rs471.25, has a target of Rs491 and a stop-loss of Rs449. ABB at its last close of Rs490.30 has a target of Rs508 and stop-loss of Rs467.
From the previous week’s recommendations, Aditya Birla Nuvo Ltd touched a high of Rs614.65, meeting its target of Rs612 easily. Tata Power Ltd touched a high of Rs793.70, which was well above its target of Rs745. Tata Steel Ltd hit a high of Rs235.70, which was also well above its target of Rs228.
Vipul Verma is a New Delhi-based independent investment adviser.