Attempts at a short-term rally in India's CNX Nifty Index are running into trouble. Signs a major market top may be forming have not been eradicated, leaving bulls butting into early March highs. The long-term downtrend in the Lowry Research proprietary buying power index remains intact, as does the uptrend in its measure of selling pressure. That is not supportive of a longer-term positive outlook for the Nifty. The rally's selective nature underlines this point - mid and small-caps have struggled - and gains have occurred on contracting volume, suggesting a lack of strength behind the rebounds. "It still appears as though periods of strength are best used for selling and building a more defensive position," Lowry says.
