Chart check: Global markets crack but Sensex, Nifty may still hit new peaks

The underlying trend for the benchmark indices continues to be bullish given that the Sensex and the Nifty50 indices honor 59,000 and 17,700 levels, respectively

Global markets roiled on Wednesday after indices on Wall Street plunged following a higher-than-expected US consumer price index report for August. Japan's Nikkei 225 dropped 2.7 per cent, and the Topix index fell 2 per cent. In Hong Kong, the Hang Seng index dipped 2.55 per cent, and the Hang Seng Tech index fell 2.96 per cent. 

The Kospi in South Korea lost 1.34 per cent, and the Kosdaq declined 1.67 per cent. 

This followed US market's overnight crash on Tuesday where key indices witnessed their biggest fall after June 2020. Dow Jones tumbled 3.94 per cent, while Nasdaq plummeted over 5 per cent. During the intraday session, Dow Jones fell nearly 1,400 points while Nasdaq dipped over 700 points with broader market notching severe bearishness. 

Back home, domestic indices clocked a smart pullback after an initial drubbing. From an intra-day low of 59,417, the benchmark S&P BSE Sensex was back above the 60,100-mark, while the Nifty50 clawed back from a low of 17,771 to 17,950.

Against this backdrop, the question remains whether the domestic markets' resilience will last long? Here's what charts say:

S&P BSE SENSEX

Outlook: Index eyes new high till 59,000 is defended.

Despite today's gap-down start on the index, the bullish trend is intact over the support of 59,000-mark, shows the daily chart. Moreover, the negative divergence in the Relative Strength Index (RSI) is not adequate to drag the index price lower than unprecedented levels. 

The broader sentiment continues to scale higher with underlying momentum to support every healthy dip. If the support of 59,000 is broken, then market participants need to feel concerned. Otherwise, this trend is approaching towards a new historic peak of 63,000. CLICK HERE FOR THE CHART

NIFTY50

Outlook: A new historic peak in the making 

In August 2022, the Nifty50 index broke out on the falling trendline hurdle connected with the all-time high to subsequent peaks. Thus, until this trendline support and the horizontal breakout mark of 17,700 is not shattered, the positive bias is here to stay for longer than anticipated. 

In addition, there is a formation of "Golden Cross" of 200-day moving average (DMA) and 50-DMA symbolizing a robust bullishness. The relentless sentiment is eyeing another peak for the index major in the near future, shows the daily chart. The index seems to be reaching 19,000 in coming sessions. CLICK HERE FOR THE CHART

NIFTYBANK

Outlook: Nifty Bank towards 42,000

There are not many sessions left for the Nifty Bank to reclaim a new historic peak, shows the daily chart. A "Golden Cross" breakout with RSI finding no reluctance in the overbought category clearly indicates more upside on cards. The immediate support for the index comes to  39,500 and 39,100 levels. The present trend is strong with intent to scale higher levels of 42,000. CLICK HERE FOR THE CHART