Nifty after breaching of the last two months trading range has struggled to move past the 200 DMA (5103) during last week trade. The Nifty drifted lower after testing the 200 days SMA on Tuesday's trade. The corrective price action may continue until we see a faster retracement of the recent falls and a breach of the lower peaks and troughs formations.
Nifty has closed below the 61.8% retracement level (4950) of the December-February rally. In the process, it has also filled the previous rising gap area of 4980 formed on January 19, 2012. Sustenance below 4950 levels in the coming sessions will see the index eventually heading for a deeper retracement of the January-February rally to the extent of 70-75%, which projects major support near 4850-4800 area.
On the higher side the Nifty will face major hurdle in the range of 5125 - 5160 levels which is the previous week high and the recent support area as the said support is likely to reverse its role as a resistance.
In India, events to watch would be monthly WPI. Key results to watch out next week would be Capital goods major L & T, Bajaj Auto, SBI, Tata Steel and Coal India.