- While the rest of the stock markets around the world have been rallying a bit, the one consistent performer that I have been paying attention to has been coming out of India.
- This makes a certain amount of sense as the Chinese economy continues to lock itself up, and of course the CCP continues its “zero Covid policy.”
- If that’s going to be the case, then it’s going to cause problems for the mainland Chinese economy.
At this point, in steps India. There are a lot of potential drivers for the Indian economy to continue to expand, not the least of which would be the troubles in China. After all, most Western governments have a favorable view of India, and the labor costs in China have been rising anyway. With that being the case, it’s very likely that we will continue to see a lot of manufacturing flowing toward the subcontinent. Beyond that, the Indian rupee has remained its weakness, which makes manufacturing in that country even more attractive.
Looking to Buy Dips
When you look at the Nifty 50, you can see that clearly the ₹18,000 level was an area that has been important, as it was major resistance previously, with the 50-Day EMA sitting in that same area. Because of this, I think that “market memory” and the indicator both offer a significant amount of pressure. If we can see above that area, I believe that the Nifty 50 will continue to show potential support and opportunities to buy on dips.
On the upside, the ₹19,000 level causes a psychological barrier, but there’s no reason to think that it is going to be any different than any other big figure. The short-term pullback should be thought of as a potential opportunity because quite frankly this is a market that has been bullish while everything else was falling apart. There’s no reason to think that as other stock indices around the world strengthen that this one won’t, quite frankly it’s been a leader for a while. I have no interest in shorting this market until we get well below the ₹18,000 level, so therefore it’s a one-way trade from what I can see now. It’s just a matter of finding a little bit of value on each dip to take advantage of so that we can get long yet again.
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