Upward momentum of market decelerates, stiff resistance ahead By PANKAJ PANDEY, ICICIDirect Indian equity benchmarks extended gains for fourth consecutive week despite some profit booking towards the end of a truncated week. Nifty started the week on a bullish note on Tuesday's trade but after the initial spurt at the start of the week, bulls appeared apprehensive near the 5,450 level as Nifty traded in a narrow range with negative bias during the rest of the week. The 30-share BSE Sensex closed at 17,783.21 up by 92.13 points or 0.52 per cent, while Nifty closed at 5,386.70, up 20.40 points or 0.38 per cent, on a week on week basis. Ranbaxy, Cipla, Coal India, Infosys, Wipro and TCS were the major gainers in the index where as Axis Bank, L&T, Bharti Airtel and Reliance were the key draggers amongst Nifty constituents. Retail inflation declined marginally to 9.86 per cent in July due to lower prices of spices, cereals and its products although prices of vegetables remained high during the month. Based on the Consumer Price Index (CPI), the inflation for June was revised downwards to 9.93 per cent from the provisional estimate of 10.02 per cent. Nymex crude closed at $96.27/barrel increasing 0.27% on a weekly basis (as on Thursday). The upward momentum of the market has decelerated as the size of the current week bullish candle has reduced significantly. On the weekly chart, Nifty has formed a small bodied candle with long upper shadow signifying stiff resistance at higher levels. The short-term bullish bias would be threatened if the index fails to surpass last Thursday's high (5,448) and then react below 5,340 to form a lower peak and trough. The immediate resistance is flagged in the range of 5,450-5,470 from the confluence of the 80% retracement of the February-June decline (5,630-4,770) and the trendline joining immediate major tops. One needs to be cautious on upward move near the 5,450-5,470 regions and watch for price sustainability, a price move above the said level will see the index testing 5,550-5,600 levels in the short term. On the lower side a breach of the immediate swing low of 5,340 can see Nifty test the rising gap area of August 6 between (5,220-5,260), which is likely to act as strong support in case of any correction. In August (till August 23), FIIs were net buyers to the tune of Rs 5,287 crore while DIIs were net sellers to the tune of Rs 2,916 crore. Key data/events to watch globally would be US MBA Mortgage applications, personal spending factory orders; Euro Zone GDP. In India the key event to watch out would be GDP data.