I noted the Nifty & Sensex indices did a weekly reversal early March, which you mentioned in your Comment of the Day. At that time you were looking for a move above the moving average to confirm upside potential, which if I am correct has happened now. How do you now interpret the prospects for the Indian market?

Eoin Treacy's view

Thank you for this email sure to be of interest to subscribers. The Indian stock market trended lower for a year; losing about a quarter of its value in nominal terms before finding support in February.

The rupee’s relative strength since February has flattered the performance of foreign denominated funds and as you point out the main stock market index is now trading back above its 200-day MA.

With a short-term overbought condition evident right now and the Dollar back at an area of potential support the potential for some consolidation of recent gains, or at least a pause, is looking increasingly likely.

Medium-term, in the absence of a shock 7000 could well represent a medium-term low for the market. If the Index finds support above that level on the first significant pullback that view would be confirmed.

Despite the large drawdown over the last year, India remains a growth market with positive long-term attributes; not least it’s young population, vibrant domestic consumer economy and desire for improving governance.