Sensex Near a Break Out From Three Year Consolidation Pattern

For those that would like additional background on this topic, please refer to our earlier post on the subject.

Otherwise, in the chart below, the Sensex appears to be attempting a break-out from a three-year flag/consolidation pattern.

As of yet, NO break-out has occurred.

However, should the index push above line (3) in the chart, that would change.

A few items worth noting if a break-out occurs:

1) The index broke out from a similar pattern in 2003 as the emerging market secular growth cycle began

2) A break-out could see the index target the ~35,000 area (+100%), which represents 20 year channel resistance

3) A break-out should probably be viewed bullishly for global economies and markets given the importance of India as a key marginal driver of growth around the world

Again, nothing has happened so let’s not get too hot and bothered / excited just yet.  However, want to pay close attention to this in the coming days/week.

Advertisements
%d bloggers like this: