After temporarily exiting the main ascending channel over weekly basis above, the index indulged in a downside correction which settled for the 23.6% correction supported by the 50 MA and then reversed to the upside to test the breached support which turned into resistance at 6050.00.
On secondary image over four-hour basis, we can see that a bullish pattern was completed with the breach of the neckline at 6000.00 supporting the upside move for the index with full targets at 6345.00 which confirms the return to the general upside move within the previously breached channel.
On the other hand, the aforesaid target at 6345.00 is the neckline for a bigger bullish pattern, where returning to the ascending channel the completion of the pattern is only a matter of time which will introduce further bullishness over short and medium term basis.
Therefore, we see the index is heading to the upside over short and medium term basis with targets starting from 6345.00 and then fluctuation to gather enough bullish momentum to continue higher towards main targets at 7000.00.
The suggested scenario requires initially a weekly closing above 6050.00 or else the index will indulge in a new bearish correction initially targeting 5700.00.
By: Yasir Mubarak
Main Technical Analyst