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The markets ended the week on a weak note. Selling pressure erased early gains and the markets closed deep in the red. The Nifty closed at 4,949 down 77 points, while the Sensex shut shop at 16,650 down 257 points.

This Week, the Sensex and Nifty ended down 4.5% and 4.1% respectively. On a weekly basis, the major lossers are Jaiprakash Associates down 12%, and HCC sown 11%.

Deven Choksey of KR Choksey Securities said the market would trade rangebound between 16,000 and 17,500 next month. "As long we are at 16,000, it would be comfortable. If it goes below16,000, we are heading for bigger trouble. The range from 16,000-17,500 would be the broader range for the market next month. There is also some amount of softening in crude oil prices that would take place. So, the upside would be around 17,300 on the Sensex. The downside would probably be around 16,300.”

If crude oil starts cooling down, we will see lot of confidence coming back into the market, he said. “There is a lack of trust or faith in the market and not much of participation. It is practically a dull market as of now for us and there is not much volume.”

Rahul Mohindar of viratechindia.com said with 5,070 broken, it sets a negative trend, and with 5,010-5,020 zone also breaking intraday, it further adds to the turmoil. “On the downside, the short-term charts indicate that we would possible head to 4,920 and below that to 4,830. We are not coming to any major conclusion. We are going to attempt a re-test of previous lows. I don’t think this is heading in for that unless it really breaks about 4,830 levels. A short-term trader would be trying to trade the downside now.”

According to Mohindar, a Nifty trader should definitely exit if one has any long positions in the short-term. “If one is attempting anything, certainly try and stay light and short.”

He sees support reemerging around 4,930-4,940 on the Nifty. “It is just the short-term turmoil. There is some nervous pressure, which obviously is going to be there. We will be locked with this volatility till then.”

E Mathew, Director, Mathew Easow Fiscal Services, said it was important for the Nifty to close above 4,950. "This uptrend would certainly be vitiated if your stop loss unfortunately is at around 4,800. Below 4,800, one can just forget about this uptrend. But even now there is still a glimmer of hope. There is still hope because this week we had so many negative factors from crude to inflation and even the drama, which is going on at the petroleum ministry etc. All that together is taking a toll on the technicals of the market too. But I do not know whether this fits into this technical show. I would just like to say that bull markets are born amid tremendous fear and they thrive on pessimism. So, let us hope that this is part of that."

Eoin Treacy, Global Strategist, Fullermoney.com, said both the Sensex and Nifty have re-tested their March supports. "They certainty haven’t led on the upside as has been the case in the past. It looks like that this is just going to be a longer consolidation. I continue to believe that the January and March lows will hold but the recovery or convalescence is going to take a little bit longer on this occasion. It is just a case of time rather than that an extension pattern before the market moves lower."

Source: Moneycontrol.com