Monday's downside action in India's stock market was a notable change from the slow grind higher we've experienced throughout August.
The news is this move was at least partially caused by some geopolitical risk and the SEBI margin requirement changes taking effect on September 1st.
Regardless of the reason for this selloff, we're going to take a look at prices and see how it's changed our short-term and long-term outlooks.
Before we get into yesterday's action, I want to address the title of this post. We are, in fact, in a Bull Market. One of the ways we measure that is by looking at the percentage of Nifty 500 stocks are above their 200-day moving average, which is around 70% after falling to nearly zero in March.
This week we're looking at the Financials' sector, which is finally starting to pick up. As such, we've identified a new long setup with an attractive reward/risk.
We retired our "Five Bull Market Barometers" in mid-July to make room for a new weekly post that's focused on the three most important charts for the week ahead.
This is that post, so let's jump into this week's edition.
Earlier this year we looked at the Nifty IT Sector and analyzed what it would take for it to finally break out to new all-time highs. Prices finally did and have since presented a lot of great opportunities on the long side for us.
In this post, we want to outline why there are similar conditions present in the Nifty FMCG Sector Index and how we're approaching it.
Three weeks ago we turned more cautious on Gold and Silver as they hit our price objectives, but today we're back with a development which suggests they may be ready to start their next leg higher.
The first section of this article is going to be a repeat of what I wrote for US subscribers today and then we'll get into what the implications are for Metals in India.
A weak US Dollar has been a big theme of ours since it broke down a few months ago...and this week it's back in focus.
Let's take a look at the chart and discuss why it needs to be on your radar in the days/weeks ahead.
Sector rotation has been driving the major equity indices across the globe higher, but they've all got one sector that's holding them back.
Today we're looking at that sector, Financials, to outline why this week's action is important and how we're approaching this segment of the market.
First, let's start with the Nifty Financial Services Index in India, which comprises about a third of the overall market's weighting. Prices have been struggling with this resistance level near 11,300 and are now trying to break out above it to new recovery highs.
On a relative basis, the index is trying to hold above long-term support against the Nifty 100 and turn higher. Outperformance, or at least in-line performance from the market's largest sector would shift this from a major headwind to a major tailwind for stocks as an asset class.
Today we're updating the chart of USD/INR which we've been monitoring for the last few months and discussing the implications of this breakdown finally *potentially* confirming.
We retired our "Five Bull Market Barometers" in mid-July to make room for a new weekly post that's focused on the three most important charts for the week ahead.
This is that post, so let's jump into this week's edition.
