Nifty 50 Forecast: Pulls Back Toward Support

• The Indian stock exchange has been one of the better performers out of all the indices that I follow lately, and the nifty 50 pulling back toward the ₹18,150 level does suggest that perhaps we are going to have an area that people could come back into the market to pick up a bit of value in what has been one of the very rare bullish markets as of late.
• Furthermore, a lot of this could come down to the exchange rate of the rupee, which could lead to more exports.

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From a longer-term standpoint, India is probably going to be one of the major benefactors of the cooling relations between the United States and China, as various Western companies in China are starting to look elsewhere for their supply chain. Furthermore, if the rupee remains rather cheap, that only further exacerbates the idea of doing manufacturing in that country, and then of course it makes Indian exports much more attractive.

Be Cautious

The ₹18,000 level is going to be an area that a lot of people paying attention to, as it is previous resistance, and of course, it is the previous support level. I do believe that somewhere between here and there we could see a little bit of a buying opportunity, and therefore signs of support or abounds anywhere near that area would have me interested in going along yet again. Underneath there, you have the 50-Day EMA near the ₹17,750 level which is rising and could of course offer a bit of dynamic support as well.

If we were to break below this indicator, then you must have the conversation of whether things are changing because in this environment, stocks have been getting killed, so one would have to think it would only take just a bit of fear to get Indian stocks falling right along with the rest of the world. While it is a bright spot amongst the major indices, the reality is that if there are worries about growth, you must be somewhat suspicious anytime there are signs of trouble. I do believe that more likely than not the buyers should return because India has flown in the face of the fear so far, and until something changes you must assume that it’s business as usual, although with a certain amount of caution.

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