[Premium] India Chartbook Update Takeaways

First up is the Nifty 50, which continues to grind higher and demonstrate the trend of large-cap stock out-performance. As long as prices are above 11,140, our upside target remains 12,820.

The Nifty 100 is also grinding higher toward our upside target of 12,640. Above 11,520 we want to be long this large-cap index.

As we discussed in our mid-cap update, the Nifty Free Float Midcap 100 is sitting near a flat 200-day moving average, therefore a neutral approach is best. With that said, the breadth improvements we've been seeing suggest that we want to be erring on the long side of its individual components.

As discussed in our small-cap update, a neutral approach toward the Nifty Free Float Smallcap 100 Index is best until we see the 200-day moving average start to flatten out and prices stabilize. We've been seeing slight breadth improvements, but we continue to see many rangebound stocks that are not actionable. There continues to be few high quality long and short setups in this market-cap segment.

In terms of breadth, we aren't seeing a confirmation of new highs in the Nifty 100 yet. We'd like to see an expansion of stocks within the index hitting new 52-week highs.

Mid-caps on the other hands are seeing an expansion of new 52-week highs despite the index itself still being well below its January highs. This is a very positive development which helps explain why we're seeing far more long setups than short setups in this market-cap segment.

As discussed above, we're not seeing the same breadth improvement in small-caps, which is keeping us more cautious in this area of the market.

The Nifty IT Index continues to lead, meeting our initial price target of 15,150. This now becomes our risk management level and our secondary target becomes 18,775.

The Fast-Moving Consumer Goods Index also met our upside target of 31,870, so our next price target has been moved up to 36,450.

Energy continues to be propelled higher by Reliance Industries, nearing our price target of 16,245. The equal-weight version of this index continues to under-perform the cap-weight version, showing a continued lack of participation among individual Energy stocks.

Nifty Pharma broke out decisively on an absolute basis and made its first higher low relative to the Nifty 500. We've been highlighting signs that this sector was bottoming for months (see here and here) and continue to like it on the long side.

The Cap-Weighted Nifty Commodities Index has offered opportunities to us on the short side for most of the year, but is beginning to stabilize and momentum is getting back into overbought conditions.

This compares to the Cap-Weighted Nifty Metals Index which remains weak, with prices below former support and momentum failing to reach overbought conditions.

The last significant development has been a breakout in the EURINR pair. If prices are above 81.95, then our upside objective is 86.50.

We're also watching for a potential failed breakout in JPYINR. If prices are above 0.628, then the bias is higher toward 0.67, but below that would confirm a failed breakout.

The Bottom Line: Not a whole lot has changed since our last Chartbook update two weeks ago and mid-cap and small-cap updates shortly thereafter. We've been hitting upside targets in a few sectors and individual names, but the majority of the trends we've been pointing to week in and week out continue. Decisive breakouts in Pharma, the stabilization in the Nifty Commodities Index, and the continued improvement of mid-cap breadth were the major changes worth noting, but I'd encourage you to check out the Chartbooks themselves for updated risk management levels and targets for everything we cover.

Thanks for reading and let us know if you have any questions.

Allstarcharts Team