The Sensex has been trading in a channel pattern and also broken out off a broad range with a gap between 18,590 and 18,616, which will be a very crucial support going forward.
The momentum indicator has given a positive crossover and is trading above the zero line.
The key support would be around 19,000 and 18,590, and resistance would be around 19,450 and 20,000.
In the short term, the index is consolidating in a range between 19,450 and 19,200, and is expected to take support around 19,200 and head up till 20,000.
Sensex- Weekly view:
The Sensex has been forming higher tops and higher bottoms on the weekly charts with support around the 20-weekly moving average, ie 18,300.
The leg on the upside as wave C or 3 has already started and is expected to move up till 21,205.
On the weekly charts, the momentum indicator has given a negative crossover, trading above the zero line.
As the index has broken out of a narrow range between 18,000 and 16,000, it is expected to continue the positive momentum and the strategy should be to buy on declines.
The key support would be around 18,254 and resistance would be around 20,000.
Sensex- Monthly view:
According to the Elliott Wave theory the index has completed wave Z and a new move on the upside has started as wave 3 or X, which can move up till 20,000/21,205.
The Sensex has formed a double top around the all-time high, ie 21207, which is a crucial resistance going forward.
The Sensex has broken out of the consolidation range forming higher tops and higher bottoms which indicates that the new move on the upside has already started and has a very high probability of crossing the all-time high.
The Sensex has taken support around the 20-monthly moving average, ie 17,592 levels, and is expected to form a positive close again on the quarterly chart.
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.