Weekly Market Outlook(18th May): Sensex has support at 11490 & resistance at 13200.

Last week, the Sensex opened at 11997.37 attained a low at 11621.30 and moved up to a high of 12256.43 before it finally closed the week at 12173.42 and thereby showed a net rise of 296.99 points on a week-to-week basis.

The range for Sensex was in the band of 12272-11492. The support gap, which is the base for any further pull-back rally, on weekly charts is placed at 11635-11492.

The near term upside can be towards 12510-12850-13200. The trend on daily and weekly charts is up and can turn down on fall and close below 11490. Prices are above the 200 day averages of 11261.

Some profit booking is expected from the peak resistance of 13200 towards lower level of 11490 which may not be broken easily.

The BSE Mid Cap index is still trading below 200 day average of 3911 & 3827 and the 2 weeks low is at 3565. If the 2 weeks low is not violated on closing, then the upside for this index can be towards 4363-4471. Failure to sustain above the 200 day averages can bring a near term correction or sideways movement. A sustained breakout above the 200 day average is required for a further rally.

BSE Small Cap is also facing a similar situation and is still under the 200 day averages. BSE Mid Cap is closer toward the 200 day averages whereas BSE Small Cap is slightly far off. The 2 weeks low for BSE Small Cap is placed at 3978. The upside is big. Therefore, the near term up outcome cannot be trusted unless a strong rise and close above 200 day averages, which are placed at 4483 and 4583 is witnessed.

A range bound movement for 2 weeks is now on in an indecisive state from the market perspective. A decisive week ahead is searching for a directional move.

Hold long positions with a stop loss of 1149 and look for price actions towards 12510-12850-13200 to book profit.