- Overnight local Indian time, the Americans reported that CPI numbers came out at 0.4% month over month, instead of the 0.6% expected.
- This should help alleviate some of the pressure on emerging market currencies, as the rest of the indices around the world celebrated. It’s also worth noting that the National Stock Exchange is getting close to major resistance.
- For example, the Nifty 50 is currently just above ₹18,000 now, which previously had been resistance.
The ₹18,400 level above has been significant resistance, and therefore it’s interesting to see that we had pulled back from there. If we can break above there, then it opens the possibility of a move to the ₹18,500 level, and then much further. When you look at the charts, we have been forming a bit of a rounding bottom for some time, and it looks like we are ready to take off to the outside. If we do in fact break the ₹18,500 level, it’s very likely that we could see this market go all the way to the ₹21,000 level, if the measured move is to be expected.
Looking to Buy the Dip
The 50-Day EMA has broken above the 200-Day EMA, forming the so-called “golden cross.” We have been in an uptrend for quite some time, but for the last year or so, the market has been trying to digest those gains. It looks as if the market is trying to determine whether it has enough momentum to continue going higher. The 200-Day EMA underneath being broken to the downside could open the potential for a significant “double top” in this index.
The biggest problem that I have with stocks in general right now is that the global economy seems to be slowing down. However, it is possible that India bucks the trend again, as India is almost certain to be a beneficiary of troubles in China. Most of the West wants nothing to do with China anymore, at least if they can get away from it. Even Apple has recently suggested that more of its iPhones are going to be built in India. I suspect this is a longer-term trend, so it does make investing in India a bit of a different animal. At this point, it still looks like a “buy on the dip” market, just as it has for a while.
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