The global markets have been quite volatile for the last few months and they have been testing patience of a lot of investors, but now they are looking quite positive having made a bottom and are also in a position to rally from here on. The following charts here make it a lot more clear and they will also enable savvy investors to position accordingly.
French CAC 40
We can see the rally from the bottom of the October bottom has taken out the resistance at the level of the 6790. Convincing break which has been followed by a good rally. The level now will act as a support and any longs created as a result will have the support at this level of 6790.
The german dax has also taken out the level at the key resistance level of 14,700. This also is a bullish sign as the support nearby means that the longs will have some sort of clarity in case they do want to use a stop loss.
For a while now the Dow has been the leader in the US across the major indices and is also forming a pattern similar to the European indices, this is perhaps pointing to the other indices also leading in the same direction. Overall this is a very bullish development and one which will give a lot of confidence to the equity investors.
The story in the Indian markets is quite different with the indices remaining below the key level which is not really something that we want to see, so there is every chance that we get the Indian markets lagging in this cycle, we could perhaps look at stocks which have more exposure to the US and the european markets and that could enable the investors to make better returns. Charts are below.
Nifty Midcap 100
The index needs to cross the 33,000 level to enable the rally to be started again. Till then we could see the similar sideways action and the corresponding reaction in the Indian stocks which could also be choppy.
Nifty Smallcap 100
This index made the high in the July of 2022 and since then has been correcting, as you can see in the image the index is trading below the key levels marked in the brown and this means that there is a lot of overhead supply that any buying has to deal with. The index needs to trade aboev the 10,700 levels for any meaningful rally to start. This also means that it is the sector which is most susceptible to any fall in the market for now.
The key takeaway then is the that we are seeing rotation in the international markets and the developed market equities are doing well whereas the Indian market has been struggling. Hopefully if the global markets improve then we could also see a rally in the Indian equities as well.
DISCLAIMER - NOT INVESTMENT ADVISE