Sunday we wrote a post reiterating our long-term view that the path of least resistance in the Rupee remains lower.

With that said, we were a bit cautious about buying the potential breakouts in USD/INR and JPY/INR until we got confirmation, but we've seen some solid follow-through over the last two days.

This post will outline how to approach getting involved in the trade if you're not already.

Today we wrote a post updating our market view, which is that we expect further chop but are looking to put cash to work slowly on the long side. In that post we outlined what we'd need to see to get aggressively long, so please check it out.

This post is going to outline several stocks that are presenting attractive reward/risk scenarios at current levels, so if you need long exposure this is where we want to be.

In this post, we're going to recap our views from the last two months, discuss our current market view, and outline what conditions need to present themselves for us to be aggressively buying stocks.

First, let's recap our posts from the last few months that outlined why we were taking a more defensive approach towards stocks.

Our first downside objectives in the major indices have been met, so we're back on the lookout for long ideas.

One stock that has caught our attention is IndoStar Capital Finance Ltd.

We've been pointing to weakness in Indian equities, and equities around the globe, since mid-January. Last week the global leader, United States equities, joined the correction party and quickly met our downside targets.

We've since flipped long US stocks and are now playing for a bounce.

Patience has paid in Indian stocks, so here's a quick update on our view now that our first downside objectives have been hit in the major indices.

There are some interesting moves happening in the Indian Rupee, so let's take a look and update our risk management levels and targets.

Here's the US Dollar/Indian Rupee pair on a longer-term basis. What's clear from the weekly chart is that our thesis remains intact. As long as prices are above 69, then the path of least resistance is still higher.

Click on chart to enlarge view.

As stocks around the globe slump, we're seeing another failed breakout attempt in one of India's largest sectors.

Let's take a look at what it means and what it's going to take for it to finally sustain new highs.

First, let's start with the Nifty IT Index on an absolute basis. Last week prices pushed above resistance near 16,500 to new all-time highs, but momentum diverged negatively and prices are now confirming a failed breakout...suggesting more time is needed to work through this overhead supply and continue its long-term trend to the upside.

Click on chart to enlarge view.

We've been advocating for a more defensive approach towards Equities for most of the last month as the Large-Cap Indices failed to hold onto their new highs and have since reiterated that sentiment throughout February. (Feb. 3rd and Feb 18th)

The strongest Equity market in the world has been the US, however, last week prices started to confirm the weakness we were seeing under the surface since January. Today we wrote a brief piece on US market breadth which reinforces our view that defense remains the name of the game.

This follow-up is to make the point that if the strongest market in the world is catching down to weakness in the rest of the world, then India and other countries that have underperformed are likely to continue struggling in the near-term.

In fact, the breadth divergences we highlighted in the US are also playing out in India.

Let's take a look.

Today we wrote a post discussing the concept of relative strength and how it's kept us on the right side of several trends over the last few years.

Now we're going to apply that analysis to the Nifty Media sector to identify if the struggling group is nearing a turning point.

Let's take a look.

Relative strength is one of our primary tools as Technicians, but we're not talking about the Relative Strength Index.

Instead, we're talking about the relative performance of one security relative to another. By identifying those assets that are outperforming or underperforming, we know which have institutional support and which do not. Institutions are looking for relative strength and momentum

Much like the Relative Strength Index, we utilize this tool as a confirmation tool for price. When relative strength diverges from price, we can identify potential turning points in the trend.

Let's take a look at a few examples.

The near-term issues we're seeing in the broader market make this an interesting environment.

On the one hand, there's reason for caution as breadth and momentum concerns weigh on the leaders and major indices but on the other hand, there are still plenty of opportunities for those with short-term time horizons and those with longer-term ones. Our primary intermediate-term timeframe is where things get messy.

With that said, let's take a look at two stocks we discussed during our Members-Only Conference Call earlier this week as they test key levels with mixed results.

Despite our cautious outlook for Equities, there's one stock setting up for a potential short squeeze...and the skewed reward/risk has gotten our attention.

Let's take a look.