Sensex can hit 49,000 mark in 2020, technical charts suggest

As calendar year 2019 (CY19) draws to a close, investors are preparing to usher in the New Year with cautious optimism amid hope of a recovery in economic growth aided by cut in interest rates by the Reserve Bank of India (RBI).

Here’s how key indices look on the technical charts.

S&P BSE Sensex: The index formed a strong bottom around 36,000 levels, which should act as a turning point in calendar year 2020 (CY20) in case the markets correct. Also, the index has managed to hold ground above the 40,000 mark, which will remain an immediate support from a short-term viewpoint. If the index breaks 40,000 levels, then 39400 – 39,000 is a medium-term support for the index. That said, the chart pattern move suggests a rally towards 49,000 levels going ahead. CLICK TO VIEW CHART

Nifty 50: The index has made fresh high twice in CY19 and the positive momentum is likely to remain intact in CY20 as well. For the Nifty, 12,500 seems to be the immediate level the index is trying to scale. The formation is “Higher High, Higher low” remains intact till the lower support of 11,800 is not broken. The MACD is successfully trading above the signal line. CLICK TO VIEW CHART

Nifty Bank index: With the three positive gap-up closes, this index is exhibiting chances of a strong up move in the months ahead. This also coincides with the “Golden Cross” that it has formed as per the daily chart. A “Golden Cross” indicates upward trend where every possible correction is likely to be followed by a buying momentum. As the index has scaled 32,000 decisively, the overall trend suggest upside towards 37,000 and 40,000 levels in CY20. CLICK TO VIEW CHART

Nifty IT index: Since April 2019 when the index scaled a new lifetime high of 16,720 levels, the Nifty IT has witnessed selling pressure. It did manage to hold the ground around 14,600, which is its 100 WMA. As it now trades above 50-WMA (weekly moving average) convincingly, one can expect a rally towards the lifetime high level again. It should be noted that the MACD has made a positive crossover below signal line. The last time when it did so, the index had rallied 10 per cent. CLICK TO VIEW CHART

NIFTY FMCG Index: The index is poised for an upside if it holds 200-DMA (day moving average) placed at 30,040 as per daily chart. Till now, the formation of “Head and Shoulder” reveals weakness and if the index slides below this key level, further downside towards 29,000 is inevitable. On the other hand, 31,500 mark looks to be the hurdle that it needs to conquer to rally towards 32,000 levels. CLICK TO VIEW CHART

Nifty Auto Index: After a deep correction of over 25 per cent in CY19, the index has managed to show some reversal. It has crossed 200-DMA successfully with technical indicators supportive of an upside. The support comes at 7,750 levels. Till the index trades above this level, the upward bias should persist. The overall trend suggests a rally towards 8,750 levels. CLICK TO VIEW CHART

Nifty Realty Index: This index has seen selling pressure above 290 levels. Indeed, the current momentum looks extremely positive. However, till Nifty Realty does not close successfully above 290 on the weekly scale, one should not be too optimistic. From a medium-term perspective, 270 remains a support. In case of a breakout, a rally towards 350 may be expected. CLICK TO VIEW CHART

Nifty Metal index: Since beginning of January till mid December 2019, the index has traded below its 200-DMA. However, the momentum seems positive as major technical indicators - RSI and MACD -suggest potential upside. The 2,800 mark that saw the index breakdown earlier still remains a major hurdle. Only a strong close above this level may trigger a next leg of upside towards 3,200 level. CLICK TO VIEW CHART