Despite the gloom about India’s economy, the country’s stock market is up 12.5 percent this year making it the best performer among the BRIC nations. India’s Sensex has also outperformed other major indices in Asia, such as the Hang Seng, Shanghai Composite and Nikkei 225.
This week Indian markets were looking for a positive direction from the government after the country’s Prime Minister Manmohan Singh took charge of the finance ministry. Singh’s recent comments have given investors hope of favorable changes to government policy and initiatives.
But the key question for investors is whether the stock market rally will be short lived or the start of something bigger.
The Sensex is dominated by a long term chart pattern. This is a down sloping triangle. It is best seen on the weekly Sensex chart. The base of the triangle is near 17900. The downside target projection for the triangle is near 15500. This downside target was achieved and the 15500 level played a strong role as a support area.