The Sensex too closed on a strong note on Thursday near its intra-week peak.
The week ahead:
The Sensex faces strong resistance just ahead in the band between 26,472 and 26,730. The 50-day moving average at 26,776, the floor of the open gap at 26,730 and the previous peak at 26,687 make the area around 26,700, a formidable resistance for the index.
If the index manages to break above this level, it can reach 26,907. Supports for the week exist at 25,871, 25,500 and 24,875.
Many global indices plumbed new lows last week before recovering to close slightly higher. CBOE volatility index hit the high of 28 before closing at 24.5. This instability in the VIX reflects the nervousness among investors.
The Dow has also been quite volatile over the past week, fluctuating in the 16,000-16,500 range over the past week. Short-term support for the index is at 16,000.
Strong decline below this level will mean that the index is heading towards the medium term support at 15,370. Conversely, the index needs to move above 16,900 to indicate a reversal in the downtrend.