After the index temporarily breached the medium term bullishness for a downside correction, the index settled for 38.2% correction for the entire upside wave that started from 3441 towards 5797. Trading reversed once again to the upside extending beyond 23.6% correction previously breached to settle above the 100 Days MA.
On the chart above, we can see the completion of a bullish pattern where the index breached its neckline at 5240. This pattern signals further bullishness over short term basis targeting the previous recorded top at 5797, yet some volatility is expected due to the negativity on momentum indicators, as the index might retest the 50 MA breached which resides around 5315 to unload the negativity and continue the suggested upside move. In general, we expect an upside move over short term basis which requires steady daily closing above 5240, as closing below this level will extend the downside correction which might reach 4905 once again.
By: Yasir Mubarak
Senior Technical Analyst