Within the interest rate cycle all countries are at different phases, Japan is the leader followed by Europe followed by USA followed by Emerging Markets. With an interest rate around 6.2% they are far from the lower band thus behind the USA in the cycle. Since the USA had rates around 6.2% coming down from 8% in the 1990s we can assume this is about where India is in the cycle. I view it as effectively buying the SP500 in 1990 which we know was a good trade.
I am not expecting returns of that magnitude and I do understand many of the issues India is facing but it's when times are bleak is when you want to buy. Technically we could be retesting the top of the down channel and the 0.786 fib. However, I can see the HS from 2013 to today but there is a large amount of volume coming in here so i believe if it breaks that 3 year trend-line we could be in trouble but if it breaks the 0.5 fib I don't think 35-40 will be an issue, in a multi year time frame.
I am not expecting returns of that magnitude and I do understand many of the issues India is facing but it's when times are bleak is when you want to buy. Technically we could be retesting the top of the down channel and the 0.786 fib. However, I can see the HS from 2013 to today but there is a large amount of volume coming in here so i believe if it breaks that 3 year trend-line we could be in trouble but if it breaks the 0.5 fib I don't think 35-40 will be an issue, in a multi year time frame.