Since late August we’ve been discussing the slow, but steady growth in the number of bearish data points pertaining to Indian Equities.
This week we got another one, with a failed breakout in the Nifty Small-Cap Index. Let’s take a look at what has happened, what it means, and how we’re approaching it.
Here’s the Nifty Small-Cap 100 Index chart we shared with members in our Sunday evening post discussing three charts for the week ahead. What we noted was that it was the only major nifty index to make new marginal highs last week, while the Nifty 50, Nifty, Nifty Next 50, and Mid-Cap 100 all made lower highs.
Click on chart to enlarge view.
Notice that prices are near a flat 200-day moving average too, which would suggest a lack of trend and a very choppy tape is in store for us in the weeks and months ahead. This would support the more cautious view taken three weeks ago and another reason for us to remain very selective in the trades we’re taking.