India’s SENSEX (SENSEX) is now attempting to breakout of its LT bullish flag pattern and a breakout could potentially take prices to new all time highs.
The current rally from 24833 has taken prices up to test its 200-day SMA and well as its bullish flag(downtrend channel) resistance.
The August 20th gap of 27440-27607 is likely to be filled when the market opens later in the day given the strong close on Wall Street overnight.
The question now is – would a breakout be sustainable in the near term?
We think that the index would require some sort of a correction in the near term before further upside can be made.
Nonetheless, as long as 26713 holds, continue to allow for more upside in the days ahead.
Pushing above 28578 would likely indicate that a new all time high is on the cards in the not too distant future. The long term chart (left) shows that the index is still on the LT uptrend as long as 24833 holds.
Only a break below this level would warn that a major top is in place and the index could be undergoing a deep correction. Higher for now. (Read Report)
Source : CIMB Research