Why Indian stocks nearing a multi-year breakout?

The below research is a part of the monthly publication "The Financial Waves Monthly Update" that gives an insight into world markets and focused on its impact on Indian financial markets. For more information visit www.wavesstrategy.com

After the world wide crash of 2008, the market dynamics changed and not only Indian stocks but many of the world major indices started moving in a big consolidation phase. 

We believe the entire world equity markets are interlinked to an extent and move in tandom but with lead and lag behavior. A few of the major world indices has already given breakout whereasBRIC (Brazil, Russia, India, China) the darlings during the bull run of 2003 to 2007 are lagging behind. But the underperformance and outperformance behavior is cyclical and our detailed analysis produced in current monthly research “The Financial Waves Monthly Update” shows Germany (DAX) index, Hong Kong (Hang Sang) index and Indian (Sensex) index. These markets are clearly exhibiting lead lag behavior.

Now we took a step forward and also analyzed the heavy weights of Indian equity index to understand that if Indian markets are really going to outperform over months or probably years to come.

Index heavy weights at a glance

The above 4 charts of Indian heavy weights are clearly showing a consolidation phase ongoing since 2008 onwards. But even then Sensex and Nifty are nearing life time highs is because of other few stocks or sectors that are constantly outperforming. The monthly research also shows those other stocks that are outperforming and that shall continue to do so going forward.

The time is running out for the ongoing correction since 2008 onwards and prices are nearing the breakout of multi-year. Do not miss out on next big opportunity and time looks ripe for Indian equity markets. Building the portfolio of stocks that will strongly outperform till 2020 and creating value for your investments!!!

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