Technical Analysis of Indian Equities by Nooresh

Global Indices drop 10% because of Long Term Capital Gains Tax in India :)

Whenever the markets correct there are a lot of headlines giving reasons for the correction !! Above can be a good headline as Global Indices across the world have corrected 10% since February 1st  Smile Another nice Tweet to sum it up.

Lets get to seeing global charts

What we notice

  • Most indices across the globe are down 5-15% from the peak in February.
  • Many are now testing the 200 dema and the previous support zones.
  • Oversold on RSI and other indicators alongwith positive divergences.
  • A short term bounce is possible in near term.
  • Review post bounce whether it can take out recent highs or not.
  • Some emerging markets like Brazil , Taiwan, Hang Seng are in strong trends. some others too.

Taiwan – Strong chart in all Time Highs.

Taiwan

Shanghai – Down 10-13% from peak and lower end of the range.

Shanghai

S&P 500 – Retesting 200 dma and 2 year trendline. 2500-2550 major support.

S&P 500 supp

Nikkei – Oversold with positive divergences. Below 200 dma but close to supports.

Nikkei i

Hang Seng – In a strong uptrend.

Hang Seng

Dow Jones – Oversold and re-testing 200 dma. Down 10% from peak. Major supports at 22500/21000. Time for a bounce ?

Dow Jones March

DAX – Oversold and at an important support level with divergences. Next supports at 11000. Down 10% from peak.

DAX

Canada – Close to retesting recent lows.

Canada

CAC – Oversold and lower end of the range.

CAC

 

Brazil – Strong chart and in all time highs.

Brazil

The Emerging Markets Index fund has not tested the lows of February whereas Nifty/Sensex did break them in last few days and has underperformed the emerging markets index.

Nifty Divergence

  • Nifty has gone below the 200 dema and the previous bottom for a day or two.
  • RSI is oversold and showing positive divergence.
  • The setup seems pointing towards a bounce and even a short term bottoming out.

An older video which explains the RSI oversold strategy - https://www.youtube.com/watch?v=p6WxDxOKGkY and more videos on RSI divergence done in previous years. Alternatively search for RSI on the website and you may get a lot of posts.

Conclusion – Time to look to deploy cash and fresh cash is our view.

Disclsoure -  Do your own research – We can be biased as we are now totally invested and looking to deploy fresh cash.

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Article by Nooresh Merani

Nooresh has written 2670 articles.

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