Strategic trade
Trade view / 09 March 2017 at 12:58 GMT

Positive technical outlook for India's Sensex

Managing Partner / Spotlight Group
United Kingdom
Instrument: 02836:xhkg
Price target: 30570
Market price: 28929.13

I usually present one trade view per week but my own portfolio acquired a long position in Sensex on January 10 at 26,856.34. In response to a request, I am providing a view on the major Indian equity index, the Sensex.

The BSE Sensex closed up just 0.09% or plus 27.19 at 28,929.13 in today’s trading following two negative sessions. The flat tone to the market is explained as the market participants were awaiting results of state elections, including Uttar Pradesh, the most populous state in the nation. 

Although the official results will not be released until March 11, if there were a signal that the Bharatiya Janata Party party were ahead it would reinforce the positive technical aspect currently enjoyed by the Sensex as shown in the inset chart below.
Sensex Source: , Spotlight Ideas     

There are several reasons why I am well disposed to India: 

• GDP growth rate is impressive; the best of the BRICS.
• Growth rate expected to increase to 8.1% in 2018; (World Bank).
• India seen a significant amount of FDI; has surpassed China.
• Consumer confidence in India is solid, all-time highs this year.

These override the weak points from last year which were:

• 500 and 1,000 rupee notes withdrawn in November...
• fight corruption, black-market and tax evasion.
• Lack of notice underlines a haphazard economic management.
• Created huge difficulties for the rural 66% of the population.

In addition, I like India as it has world-class companies that adhere to many internationally accepted benchmark standards, especially in the accounting and technical spaces. 

The government has allowed the market to have its head, and so like any democracy it can be noisy and at times messy. However, I would always prefer investments in a liquid, messy, and noisy democracy with a respect for the free market than a state-controlled exercise where accounting is suspect and the market may be manipulated.

Sensex five-year chart:
Sensex Source: Spotlight Ideas

Management and risk:

Parameters (Sensex)

Entry: long at 26,856.34 from January 10; would still buy.

Targets: 29,441... 30,294 ... 31,570.

Stop: 28,500.

Time horizon: strategic.

— Edited by Clemens Bomsdorf

Non-independent investment research disclaimer applies. Read more

A compiled overview of Trade Views provided on is found here
SierraPt. SierraPt.
In Saxotrader under this ticker they have iShares Core S&P BSE SENSEX India Index ETF, last traded at 19'560
Stephen Pope Stephen Pope
Yes...that is true.

This was an article to answer a specific request about the Sensex.

As you say...the way to get exposure to Indian equities on this platform is via an ETF listed in Hong Kong.
bhushan bhushan
Really very nice on your part to share the whole analysis.Steve the success of your trades lies in your indepth knowledge and analysis.Great.
ChristianK ChristianK
It can also be bought in Singapore (SGX) under I98. Trades both in USD or SGD.


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