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India’s Stock Market Could Outperform All Others In 2017 And 2018

From Taki Tsaklanos: Which will be the strongest stock bull market of 2017 and 2018? That is the million dollar question for any investor.

InvestingHaven’s research team forecasts that the most powerful stock bull market this year and next year will play out in … India.

Right now, there is a lot of optimism on the U.S. stock market. While it definitely has been a great ride in the U.S., it certainly also has been a long ride. Presumably, this 8-year long bull market is due a longer term correction. When exactly that will start, nobody really knows, but we expect later this year somewhere.

We said before that we do not expect a stock market crash in 2017 which is what some are forecasting. However, we have always said that our stock market outlook for 2017 was bullish for the first period of the year, but we would evaluate around summer time. We start seeing signs of overly bullish sentiment, and that is dangerous.

A U.S. stock market bubble in 2017 is certainly a potential scenario. Watch Yields as a leading indicator for that, as well as the health stock market sector.

Why India’s powerful stock bull market will run in 2017 and 2018

Back to India.

When forecasting it is mandatory to look at long term charts and patterns. The Nifty 50 Index which represents the 50 largest stocks in India is shown on the 13-year chart below. Visibly, the index is in a strong secular uptrend.

Interestingly, India went through a very long term consolidation period, in particular between 2008 and 2014. The golden rule in markets is that the longer the consolidation the stronger the trend that follows afterwards.

After the Nifty 50 Index broke out in 2014, it moved very fast to 9000 points, and came back to test its secular uptrend last year. Since then, prices moved steadily higher.

Right now, India is engaging in a triple top breakout. That is exactly the same chart pattern that the S&P 500 and other U.S. indices went through in 2012. Investors remember what happened in the 24 months that followed that time period.

The reason why InvestingHaven’s research team is so bullish on India is not only the triple top breakout, but, more so, its characteristic to move strongly higher once it is trending. Watch the 2005 to 2007 time period, as well as 2014.

We won’t be surprised if Nifty 50 will trade at 12,500 points somewhere in 2018.

The most traded ETF is INDY. For more leverage, investors can check the small cap ETF’s SMIN and SCIF.

stock bull market 2017 2018

The iShares S&P India Nifty 50 Index Fund (NASDAQ:INDY) closed at $31.84 on Friday, up $0.06 (+0.19%). Year-to-date, INDY has gained 16.46%, versus a 4.62% rise in the benchmark S&P 500 index during the same period.

INDY currently has an ETF Daily News SMART Grade of A (Strong Buy), and is ranked #14 of 77 ETFs in the Asia Pacific Equities Ex-China ETFs category.

This article is brought to you courtesy of Investing Haven.

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