This week Nifty futures has traded above the 8000 mark. The Indian market has been performing so well since march that after looking at the charts the first question comes to the mind is; is it gonna go down at all?
A lot of credit of this upwards run goes to India's new elected Prime Minister, Narendra Modi and the hope that everybody has tied-up with his promises of renewing India's economic vigor. The poll results on 16th May 2014 decided that he was going to be the next PM. At this point the market had already rallied a 1000 pts from the levels of 6300 & I believe was too late to enter into the market to catch such a long run. He was Chief Minister of a western Indian state for 3 terms, his policies and his openness for businesses from all over the world was no surprise for many. So technical analysis or India's elections no matter what you follow, there were clear-cut signals to catch 2000 points easily.
If we look back at march, the market broke 6350 levels in the first week of march, which it was trying to hold for more than six months and that was an easy yet very profitable buy. If you could grab an opportunity around these levels you would have had a very small stop-loss and the buy was supported by numerous candlestick patterns, so confidence to enter a buying position here was very high.
Now after such a long run, with a favorite government or not the markets intend to correct; 7830 is a very crucial level you have to watch if markets move a little lower, further it would be 7460 and 7200. If liquidity continues to flow & India gathers more & more investments our next target would be 8430.