DJIA formed a big green candle on the weekly chart as a follow up to the previous week's hammer at support. A careful look at the chart also reveals a third attempt at breaking above an ascending triangle at a horizontal level close to 40K. This attempt looks much more convincing because it forms from a 3rd higher bottom and is a big green candle closing comfortably above 40K unlike the previous attempts.
Similarly, Nasdaq has formed a big green candle after the strong Piercing Pattern from last week, suggesting strong bullish momentum.
Lets look at the weekly charts below.
DJIA Weekly Chart - A strong breakout above Resistance following a Hammer from last week
Nasdaq Weekly Chart - Big Green candle following a Piercing Pattern from last week
Last week, the Indian markets started on a weak note with a negative bias for the first 3 days and then rebounded strongly on Friday in sync with the global markets following the favorable CPI report that came out in the US on Thursday.
Nifty closed the week on Friday very strong with a big green breakout above the horizontal resistance at 24400. As per the weekend rule, a strong breakout on a Friday is followed by continued bullish momentum in the early part of next week. Chart below.
Nifty Daily Chart - Big Green breakout on Friday
Banknifty also looks in a very convincing bullish position with the daily candle on Friday forming a mild Bullish Engulfing pattern. What lends credence to the formation is that it has formed at a Double Bottom support which itself has formed at the lower boundary of an upward sloping channel. Chart below.
Banknifty Daily Chart - Bullish Engulfing at Double Bottom
Nifty IT has also formed a long green candle on its weekly chart close to its all time high. The other sectoral indices look mildly to strongly bullish on their weekly charts. Given the broad based nature of the bullish price action and support from global indices, it looks very likely that the next week would provide strong continuation of the bullish momentum, at least in the early part.
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