Mumbai: India’s benchmark stock indices are likely to log further gains as the Nifty formed the Golden Crossover pattern, which is seen as a bullish sign. Analysts said the market tends to go up by another 5-10 per cent in the weeks after this occurs on the charts.

A Golden Cross is formed when a stock or an index’s 50-Day Moving Average (DMA) crosses above its 200-DMA — a crucial long-term trend indicator.

The Golden Cross indicates a bull market when the crossover is accompanied by high trading volumes. Once the crossover occurs, the long-term moving average is considered as the major support level for the markets.

The Nifty closed 94.85 points higher, or up 0.8 per cent, at 11,466.45 on Monday.

“The outlook is positive and market is forming a higher base. The support for the market is at 11,200 and it can go to 11,750 in the coming weeks,” said Chandan Taparia, derivatives analyst at Motilal Oswal.

Currently, the 50-DMA of the Nifty is placed at 10,864 and the 200-DMA is placed at 10,828.8.

The index has gained more than 50 per cent from its 2020 low of 7,511.1 hit on March 24 as a weaker dollar and easy monetary policy of global central banks has pushed liquidity towards emerging markets.

“It signals a change of trend. The Nifty can touch 11,700 in the short term. Currently, 65-66 per cent of stocks in the CNX 500 are trading above 200-DMAs, which is again a good sign,” said Dharmesh Shah, head — technicals at ICICI Securities.