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Sensex, Nifty: Does the market rally have more legs? Here's what charts say

Investors react as they watch the stock prices on a digital screen, at BSE building in Mumbai
Equity markets continued its journey north on Wednesday, with the benchmark Nifty breaching the 10,000 level for the first time since March 2020. Buying was witnessed across-the-board with financials leading the pack. 

The sharp upswing in the market has got several traders off guard. Shrugging off grim economic forecasts and rising Covid-19 cases, the benchmark Nifty has climbed 11.4% — from 8,823 on May 18 to 9,826 on June 1 in just nine trading sessions. Interestingly, all the 50 Nifty components have delivered positive gains during this period. READ ABOUT IT HERE

Is this rally sustainable?  Here's what charts suggest for the key equity indices 

S&P BSE SENSEX: The index needs to hold 33,970 decisively in the current week for the positive trend to sustain. The index has seen five consecutive positive closes after nearly three months. The optimism may grow stronger if it stays above the 33,970 mark. The immediate resistance comes in at 34.800 levels. The Moving Average Convergence Divergence (MACD) is attempting to cross the zero line upward and this may further boost the positive bias. CLICK HERE FOR THE CHART

NIFTY 50: This week holds the breadth for the medium-term trend. The index needs to close above the 50% Fibonacci retracement of 9,970 to confirm the next immediate upside towards 10,550 levels. The 100-day moving average (DMA) is placed at 10,360, which would act as a resistance. The overall trend is bullish with stocks absorbing selling pressure on every higher level. This may accelerate further if the index holds 9,970 levels for the current week. CLICK HERE FOR THE CHART

NIFTY BANK: It is heading towards the resistance range of 22,000 – 22,500 mark. On conquering this range, the index may rally towards 24,000 levels. The MACD is headed toward the zero line. If it manages to cross it, then the direction and strength should further boost the positive bias. The volumes are gradually rising, which indicates strength, as per the daily chart. The index needs to move above the average volumes to sustain the upside. The support remains at 20,400 levels on closing basis. CLICK HERE FOR THE CHART

NIFTY AUTO: This index is showing stability above 6,000 levels. This should make the trend stronger to rally towards the resistance of 7,000 levels. At current level, the index is hovering around 100- DMA placed at 6,560 levels. The trend looks positive; however, the volumes have remained modest on the weekly chart. CLICK HERE FOR THE CHART

NIFTY PHARMA: The monthly chart indicates a breakout on “Falling channel pattern” which exhibits a bullish view; however, the volumes have remained moderate. The current momentum suggests an upside that may see selling pressure above 10,100 levels. Even on the weekly chart, one can see price crossing 200-weekly moving average (WMA), showing strong upward strength. The overall trend looks promising, but the upside seems to be capped around 10,100 levels. The daily chart shows  9,600 levels as a support on the closing basis. CLICK HERE FOR THE CHART

NIFTY FMCG: The current price is struggling at 200-DMA placed at 29,540 and 100-WMA located at 29,790 levels. So the breakout above the 30,000 levels may see FMCG index heading towards 30,600 to 30,800 levels. The trend looks positive with higher prices witnessing selling pressure. The stability above 30,000 mark should see addition of longs for medium-term perspective. CLICK HERE FOR THE CHART

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