Continues to Walk Along a Trendline

Keep in mind that markets have been extraordinarily strong in India, despite the fact that there have been recent fraud allegations. While the rest of the world has been languishing, India has been outperforming.

• The nifty 50 bounced a bit during the training session on Friday as we continue to walk along a trendline for the massive channel that we have been in for a while.
• Furthermore, the 200-Day EMA is sitting right here as well, and the candlestick looks somewhat like a hammer. That being said, I don’t necessarily think that we are in the clear quite yet, but it is certainly an area worth watching.
• After all, the area has been noisy, but it’s also worth noting that the 50-Day EMA sits just above, and of course right at the ₹18,000 level.

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Ultimately, this is a market that squeezes between these 2 major moving averages, and that typically leads to a bigger move. The one thing that I would say about India, is that for the most part, it has outperformed most of the rest of the world. However, there was probably not a lot of foresight as to the blockbuster jobs number in the United States, so it’ll be interesting to see how India reacts to the idea of tighter monetary policy in the United States, assuming that the market believes that to be the case now.

Noise Ahead

From a technical analysis standpoint, it’s obvious that the ₹17,400 level has brought in more buyers, and breaking down below the candlestick that touch that area on Wednesday could bring in a lot of selling pressure. Alternatively, if we can get above the ₹18,150 level, then it’s very likely that we will make a move toward the top of the overall channel, which opens up the possibility of the ₹19,000 level or so.

Keep in mind that markets have been extraordinarily strong in India, despite the fact that there have been recent fraud allegations. While the rest of the world has been languishing, India has been outperforming. I suspect that it’s probably still the case as long as people believe there is a positive story out there. Nonetheless, I think you would see a lot of noisy behavior and if we did break down below the most recent low, then you probably have to bail on the trade and perhaps reset somewhere closer to the ₹16,800 regions to look for buyers again. Either way, India is a longer-term player as well, as India will be overtaking China in the next few years.

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