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Volume is picking up a bit these past few weeks and that has helped this gentle move higher for the SENSEX, although the price action was lower this week as you can see.This is due to a long overdue correction to an overbought daily chart. A fairly soft downward signal from the MACD has been in place since the end of last year but as you can see the study is very flat, hence the overall sideways move. This latest move has actually seen the fast line turn up slightly but the study is so flat this broad sideways movement with a slightly firmer bias is likely to continue. The April high of 18,047 acted as overhead resistance for a while but now we seem to have broken this.One more encouraging sign is the Momentum study which is turning up slightly. However, it would be better if this was accompanied by a pick up in overall volume. The index is also obviously finding some support from the old 61.8 pct Fibonacci retracement level, as you can clearly see on the top chart, every time it corrects back.You can also see how the rally has slowed as the volume tailed off since the turn in Q1 last year. But if you are an investor in the India market take some heart from the Relative Performance of India stocks as per the second chart. It is still way outperforming global markets since the Q1 09 turn. There is major support around the 15,500 level, if that breaks the outlook changes considerably. |
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