Eoin Treacy's view India has come under some quite sustained negative press over the last few months. Complaints about the quality of governance in the face of higher food prices as well as a slew of corruption scandals have rocked investor confidence.

The stock market, having been one of the best global performers in 2010, has experienced a deeper pullback than many of its Asian neighbours; spending much of the last few months ranging below its 200-day MA. Despite short-term negative sentiment, India remains on a solid long-term growth trajectory. The Nifty Index posted an impressive upward dynamic today which further bolsters the view that it has completed its mean reversion.

The Bombay Banks Index has been a lead indicator for the wider stock market since bottoming in early 2009. It had become quite overextended relative to the trend mean, represented by the 200-day MA, when it hit a medium-term peak near 15,000 in November. The Index pulled back to test the 2008 peak near 12,000 by January and today's upward dynamic breaks the five-month progression of lower rally highs. At this point a sustained move below 11,400 would be required to question recovery potential. (Also see Comment of the Day on September 10th).

Indian bank ADRs such as HDFC, ICICI Bank and the London listed GDR for State Bank of India are all performing more or less in line with the Bombay Banks Index.

USA listed Healthcare company, Dr Reddys Laboratories, is performing in line with the wider Nifty Index. UK listed Ranbaxy Laboratories has had a considerably deeper reaction and needs to sustain a move above $12 to indicate a return to medium-term demand dominance.

Tata Motors was one of last year's star performers but had become quite overextended relative to the 200-day MA when it encountered resistance near $38 in November. It has since pulled back to find support in the region of the MA, near $25, and a sustained move below $23 would be required to question recovery potential.

Information Technology company, Wipro has been ranging mostly above the 200-day MA since late 2009. It pushed back above $24 this week and a sustained move below $12.50 would be required to question medium-term scope for additional higher to lateral ranging. Infosys has also completed a reversion to the mean and appears to be in the process of confirming support in the region of $65