Long-term trend remains bullish

Trend following signals suggest buying the Nifty with a stop at 10,350

The market edged past the Nifty 10,500 mark and tested 10,550 before a small sell-off on Wednesday. This surge came after a low of 10,074 points in the morning when Gujarat election results were announced.

The current breakout confirms that the long trend remains bullish, going into 2018. The January settlement will be extremely important for two reasons. The first is, it will give us an inkling of foreign portfolio investors (FPI) attitude in what is a new financial year. The second reason is that the Budget on February 1, will start being discounted during this settlement.

By definition, the