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The rally in Indian equities this month has steamrolled through numerous technical indicators as it gains momentum.
The NSE Nifty 50 Index has risen more than 7% this month. Its 14-day relative strength index - a measure of the magnitude of recent price changes - has taken just 14 sessions to move from oversold to overbought territory, its fastest pace on record. A score below 30 is considered oversold and above 70 overbought.
Until recently, India was one of Asia's worst-performing markets. But optimism is growing over the economy, as well as the central bank's recent efforts to add liquidity. Interest rates are expected to fall, and Indian authorities are working to seek an exemption from President Donald Trump's reciprocal tariffs. Foreign investors bought $515 million of shares last week.
The Nifty 50 erased its losses for the year on Monday and is just 1% away from the closely followed 200-day moving average. It crossed the 100-day measure, which has acted as both support and resistance over the last year, on Monday.
It isn't just large caps that are benefiting. The NSE Nifty Smallcap 250 Index has rallied 10% from early March lows. The index has broken out above the bullish inverted head and shoulders pattern.
Technical analysts see the setup as an indication of bearish pressures waning and bulls taking over. The rally has been swift, but the index still needs to gain around 5% from current levels to achieve its target.
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