What's in store for the stock markets next week

Special to Firstpost

S&P CNX Nifty (5476.10): As observed last week, the index is on course to hit the immediate resistance at 5,590. It is positive to note that the fall in the early part of the week was arrested at the support zone of 5,300-5,350 that was highlighted last week.

While there is a possibility of a rally to 5,590, the index has to move above the major resistance at 5,650 to indicate a reversal of the medium-term downtrend.

The recent range-bound action will continue unless the index moves either above 5,650 or falls below the major support at 5,300. Long positions may be considered on weakness, with a stop-loss at 5,300 and target of 5,590.

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BSE Sensex (18,266.10): After a blip in the first few trading sessions of the week, the

[caption id=“attachment_16962” align=“alignleft” width=“380” caption=“Arvind Limited was one of the top gainers last week. Danish Siddiqui/Reuters”]  [/caption]

index posted a sharp recovery from Wednesday. The technical indicators support the view that the index could target the short-term resistance at 18,615.

As observed last week, only a breakout past the major resistance at 19,010 would indicate a reversal of the short-term downtrend.

It would be safer to take some profits or prune long positions on a move towards 19,010. Fresh buying may be considered at or closer to the support at 17,800.

Arvind Limited (Rs 80.50): The stock was one of the top gainers last week and the chart patterns suggest a rally to the immediate resistance at Rs 92. There is a lot of support and buying interest at the Rs 70 mark.

A close below Rs 69 would indicate reversal of the uptrend. The stock may be bought at the current levels and on declines, with a stop-loss at Rs 68.50.

A breakout past the immediate resistance at Rs 92 could trigger a rally to Rs 98.

Dabur India Ltd (Rs 108.15): As highlighted in the chart, the stock has been moving within a bullish trend channel and a rally to the upper parallel line of this channel at Rs 126 appears likely.

The stock is now perched right below the crucial resistance in the Rs 110-112 range. A breakout past Rs 112 would confirm the case for a rally to Rs 126. Long positions may be considered either on a breakout past Rs 112 or on weakness, with a stop-loss at Rs 97.

(The views and recommendations featured in this column are based on a technical analysis of historical price action. There is a risk of loss in trading. The author may have positions and interest in the instruments featured in the column.)