India Monthly Charts Are Out!

The strength in large-caps continues, with the Nifty 50 making new all-time closing higher.

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The Nifty 100 closed at the highs of the month, suggesting continued upside to 12,640 is likely.

Mid-caps held support in July and continued higher this month, confirming a higher low and a continuation of trend to the upside.

Small-caps also held support in July, but showed much weaker follow-through than mid-caps.

Overall though, amid mid and small-cap stabilization, large-cap out-performance continues to drive the Nifty 500 higher.

The Nifty Bank Index made new all-time highs helped along by breakouts in stocks like Axis Bank (see below), however, many stocks in this sector are consolidating, slowing the index's gains.

Axis Bank broke out of a multi-year consolidation to close at all-time highs. If prices are above 626, upside to 980 over the long-term is what we're looking for.

The Nifty Fast Moving Consumer Goods Index also closed at all-time highs, going out toward the highs of the month. Continued out-performance from this large sector makes it hard to be bearish Indian equities.

The Nifty IT Index also went out at the highs of the month, at all-time highs.

The Nifty Pharma has emerged from its bottoming pattern and began a new uptrend like we've been looking for.

This rally in Pharma has been led by the relative strength in its largest component, Sun Pharmaceuticals.

Weaker sectors like Commodities and Metals have followed through from their reversals last month to close above support. Stabilization in these areas is very positive for the broader market.

The Nifty Infrastructure Index is a weak sector that's bounced, however, it's not yet reclaimed former support / resistance near its former all-time highs.

Others like the Nifty Media Index have yet to see any sort of bounce and remain weak below support.

In the base metals space, components like Lead were weak to start the month and reversed higher. While a short-term positive, most remain below key support levels, so we'll need to see upside continuation in the months ahead.

Crude Oil remains one of the few positives in the Commodities space. It continues to consolidate above support, so we'll look for upside continuation next month.

We've finally got the breakout in USD/INR that we've been looking for.

Similarly, JPY/INR close above resistance as well this month (as did EUR/INR and GBP/INR).

The Bottom Line: It's hard to look at these monthly charts and and be anything but bullish Indian Equities. That doesn't mean we can go out and own anything and everything, but it does mean we want to be erring on the long side and looking for the best individual opportunities to capitalize on the uptrend in equities. Commodities remain a tough space, but there are new trends in the Currency markets that we can be taking advantage of.

These are the long-term trends we're trading within the context of. It's important to keep them in mind during all the day to day noise the market throws at us.

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Allstarcharts Team