- India continues to outshine most of its competitors, as the Nifty 50 has recovered to reach the ₹18,500 level during the session on Monday.
- Remember, India had outperformed many other stock indices around the world over the last several months, so this should not be huge surprise.
- If we start to see a little bit of a bounce in the stock markets overall, it stands to reason that India will move right along with it.
The 50-Day EMA sits just above the ₹18,000 level, a large, round, psychologically significant figure that has also been significant resistance previously. Because of this, I think quite a bit of market memory could come into the picture, offering a bit of value that people are willing to take advantage of. I suspect that we will continue to see a bit of a listless drift around as we wait to see what happens with a couple of major central banks are weak, and of course, the volume starts to dry up. As we are heading towards the holidays, it will make large moves less likely, barring some type of unexpected or unforeseen announcement.
Looking to Buy the Dip
Keep in mind that the low liquidity can also make for big moves, but that will be through the prism of markets that are surprised by something and don’t have enough participants to have stable moves. With that being said, I suspect this is a situation where it is a “buy on the dip” type of situation, but not necessarily one that is going to have massive gains over the last 3 weeks of the year.
The fact is that the Indian stock exchange is in an uptrend, and that’s really all you need to know. I would not go “all in” into the Nifty 50 at this time of year, just as I would say about any other market. Nonetheless, we most certainly have an upward bias, and I just don’t see how those changes anytime soon. Keep in mind that China continues to suffer, which of course is going to be a major benefit for India, as it is looking to replace China as the world’s factory over the next couple of decades. Ultimately, I think this market is going to go looking toward the ₹19,000 level, but that’s probably a story for January.
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