The Nifty almost revisited its January lows of 4,450 before bouncing back a wee bit. The index slumped to a low of 4,469, recovered to a high of 4,718 and eventually ended with a loss of 172 points at 4,574.

The index broke its yearly S3 (support 3) level of 4,500 on an intra-day basis twice in the week, but somehow managed to close above it. Going by the current trend, the chances of the index testing lower levels of 4,100 and 3,500 remain high.

The charts are indicating an oversold zone. Hence, a significant pullback cannot be ruled out. However, the rally would just be a relief rally and the markets may drop again.

The significant indicator is the Stochastic Slow, which is in a highly oversold zone. The per cent D value is 9 and the per cent K is at 7.4. There will be a buy confirmation once the per cent K crosses the per cent D level.

Both are in an oversold zone as they are below the 30 per cent mark. The 14-day Stochastic Slow is drawn with two lines - per cent K and per cent D - with a 3-day range.

The bearish phase will reverse after the Nifty moves back above the 200-DMA (daily moving average), which is 5,080, and closes above the yearly S1 (support 1) at 5,135. The index may find support around 4,400 this week.

The Sensex moved in a range of 789 points last week and broke yet another psychological mark, of 15,000. The index touched a low of 14,677 before finally ending with a loss of 766 points at 14,995.

We maintain our previous view that the index would drop to 12,000, with some support around 13,900. However, given the oversold position, a relief rally may be in the offing. In case of a sharp pullback, the index may even rally up to 16,650 to 17,200 levels in the near term.

The Sensex is likely to find support around 14,700-14,600-14,500 this week, while it may face resistance around 15,300-15,400-15,500 on the upside