The field of Mobile Communication has seen enormous changes in recent years that has led to drastic shifts in the ways communication is done. From second generation to now fifth generation has been possible because of time-to-time innovation of many different technologies that have provided higher bandwidth to higher transmission data rates etc. The Smart Antenna system is one such technology that not only improves channel capacity but also provides better interference rejection with improved signal-to-noise ratio. Smart antennas perform dual operation of trans-reception. They sense the angular direction that hits the antenna array at the base station and radiate beam towards the estimated direction. The paper presents a new adaptive algorithm that can be utilized by the digital signal processing unit of smart antenna to detect the direction of mobile users trying to seek access by connecting wirelessly with the nearest base station for communication. The algorithm outperforms other existing ones successfully resolving even those sources that are close to each other. The proposed method provides better resolution.