The Indian benchmark indices witnessed a strong rise last week. The Nifty 50, Sensex and the Nifty Bank index were all up over 2 per cent. Nifty Bank index has made a bullish range breakout. Sensex and Nifty on the other hand have risen well after forming a bullish inverted head and shoulder reversal pattern on the chart. This leaves the picture positive on the charts for the benchmark indices. The rise last week also confirms that the correction has ended, and the overall uptrend has resumed.

Among the sectors, the BSE Reatly and BSE Consumer Durables index outperformed last week. They were up 5.41 per cent and 5.15 per cent respectively. The BSE FMCG is the only sector that ended in red last week. The index was down 0.2 per cent.

FPIs buy

The Foreign Portfolio Investors bought Indian equities for the second consecutive week. Indeed, this week the quantum of purchase was also strong. They pumped in about $2.88 billion into the equity segment last week. The month of December has begun on a positive note. If this sustains, then Nifty and Sensex can go up further in the coming weeks.

Nifty 50 (24,677.80)

Nifty sustained well above 24,000 and has risen breaking above the resistance at 24,350. It touched a high of 24,857.75 before closing the week at 24,677.80, up 2.27 per cent.

Short-term view: The outlook is bullish. There is an inverted head and shoulder pattern formation on the chart. Supports are at 24,550 and 24,250, the neckline support of the pattern. Nifty can rise to 25,000-25,100 first. An eventual break above 25,100 can take it up to 25,400-25,500 in the short term.

The near-term picture will turn weak only if a fall below 24,250 occurs. If that happens, a test of 24,000 is possible. The short-term outlook will turn negative only if the Nifty declines below 24,000. But that looks less likely at the moment.

Medium-term view: The strong rise above 24,500 accompanied by the inverted head and shoulder formation indicates that the correction has ended. Cluster of supports is there now in the broad 24,000-23,000 region.

Nifty can now revisit 26,000 levels in the coming months. If the momentum remains strong, then a decisive break above 26,000 will have the potential to take the Nifty up to 28,000 next year.

Nifty Bank (53,509.50)

The sideways consolidation has come to an end. The Nifty Bank index broke the 49,800-52,600 range on the upside and rose to a high of 53,888.30 last week. It has come off slightly from the high to close the week at 53,509.50, up 2.79 per cent.

Short-term view: The range breakout has turned the short-term outlook bullish. Immediate support is at 53,000. Below that, 52,600 will be next strong support. The Nifty Bank index can rise to 55,400-55,500 in the coming weeks.

This bullish outlook will get negated only if the index declines below 52,600. In that case, the index will fall back into the range and can decline to 52,000 and lower. But as the range breakout has happened after a prolonged consolidation, a fall below 52,600 is unlikely.

Medium-term view: Our broader bullish view remains intact. The 49,000-48,000 support zone is continuing to hold well. The levels of 52,000 and 50,000 will now be good supports. We retain our bullish view of the Nifty Bank index targeting 57,000-58,000 on the upside next year.

A sustained break below the 49,000-48,000 support zone is needed to turn the outlook negative. But that would need some strong negative trigger.

Sensex (81,709.12)

Sensex has risen sharply breaking above the resistance at 80,500. It made a high of 82,317.74 before closing the week at 81,709.12, up 2.39 per cent.

Short-term view: The outlook is bullish with an inverted head and shoulder formation on the chart. Cluster of supports is there in the 80,500-80,000 region. Sensex can rise to 83,500-83,700 first from the region. A further break above 83,700 can take the index up to 84,500 in the short-term.

Sensex will now have to fall below 80,000 to turn the outlook negative. Only then a fall to 78,000 and lower levels will come into the picture again.

Medium-term view: The outlook is bullish. The broad region between 80,000 and 78,000 can now act as a strong support. Sensex can rise to 87,000-87,500 in the coming months.

Sensex has to break 80,000 first and then get a subsequent fall below 78,000 to become bearish again. If that happens, 76,000 and lower levels can be seen on the downside. However, such a fall is less likely. We can expect the Sensex to remain above 78,000.

Dow Jones (44,642.52)

The Dow Jones Industrial Average is struggling to get a strong follow-through rise above 45,000. The index failed to sustain the break above this psychological mark for the second consecutive week. It touched a new high of 45,073.63 and has come down from there. The Dow has closed the week at 44,642.52, down 0.6 per cent.

Outlook: Broadly, the Dow was range bound between 44,500 and 45,000 last week. However, price action on the daily chart leaves the bias negative. The region around 45,000 is a strong long-term trendline resistance. So, the chances are high to see a break below 44,500 in the coming days. Such a break can drag the Dow Jones down to 44,000-43,500 initially.

From a big picture, this corrective fall from around 45,000 may have the potential to drag the index down to 42,000 in the coming months.

A sustained break above 45,000 is needed to negate the aforesaid fall. If that happens, then the Dow Jones can rise to 45,700