Indian BSE Sensex Index: New all-time highs after steep recovery rally – Commerzbank

The Indian BSE Sensex Index, which is weighted by free-float market capitalisation, comprises the 30 largest and most liquid Indian stocks and thus reflects India’s most important industrial sectors. In local currency, the Indian Sensex has been in an intact bull market movement and enjoys medium and long-term relative strength, economists at Commerzbank report.

Key quotes

“From the higher-level technical perspective, the index has been in a very long-term bull market movement comprising buy signals, upward thrusts and trend-confirming consolidations. The current bull market cycle started at 8050 points in March 2009. In January 2020, this trend led the Sensex to then all-time highs at levels around 42274 points.” 

“During the ‘Corona bear market movement’, the bull market trend was left, and the index was pushed to 25658 points in a sell-off. After reversing upward, the Sensex established an intact steep uptrend (trend line currently around 42450 points), which led the index to new all-time highs, and we even saw an upward acceleration in November 2020.” 

“The Sensex currently exhibits a strongly overbought technical situation both short and medium-term, which means we are likely to see a consolidation and significantly diminishing upward momentum.” 

“Overall, a continuation of the bull market movement and technical price potential up to 50000 points seem to be on the cards for 2021.”