 "Chart Reading: Sensex and Nifty are heading towards higher highs")
The S&P BSE Sensex and the Nifty50 index are heading towards higher highs, helped by positive global cues. The sentiment stays highly optimistic with support from Bank Nifty and Nifty IT indices.
On a weekly basis, the BSE Sensex soared 1.05 per cent or 377 points, while the Nifty50 rose 1.04 per cent or 117 points.
With the bullish Diamond pattern along with 'progressive Golden crossover', the indices indicate rising channel formation on the daily chart. The pattern suggests that the prices are moving within the two parallel trend lines. The upper rising trend line connects the swing high, a resistance for prices to move forward and lower rising trend line highlights the swing low, providing support for the corrective move. The breach of the trend line on either side will lead to a new trend, bullish or bearish.
BSE Sensex: The index closed flat on Friday, just 0.03 per cent up at 36,386. The week witnessed index testing and reversing from the support of 200-day moving average (DMA) of 35,714, currently located at 35,780. The rising channel pattern indicates an upward trend heading towards a possible level of 37,400 - the resistance of an upward rising trend line as per the daily chart. The lower rising trend line provides support at 35,500 with 50-DMA at 35,774 level and 100-DMA at 35,960 level. The overall trend remains bullish as the index is trading well above 21-day simple moving average (SMA) of 35,730, of Bollinger band on the weekly scale, the chart suggests.
BSE Sensex
Nifty50: During the last three sessions, the index closed in a narrow range of 10,910 -10,890. The lower side swings were near its 100-day moving average (DMA) around 10,830 levels. The 200-day moving average (DMA) is in the process of converging with 100-DMA, leading to more optimism as per the daily chart. The lower rising trend line is located at 10,630, while resistance at upper rising trend line is at 11,200 levels, which seems to be an immediate target, the chart suggests.
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