India, Japan, and Taiwan - these countries are experiencing a confirmed uptrend, but investors should remain cautious of the potential impact of softening demand from China on India's growth trajectory, says Dean Kim, Head-Global Research Product at William O'Neil + Co.

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The Nifty's 21-day moving average serves as a strong support level for the Indian market, providing valuable guidance during market fluctuations. Despite the challenges, Kim maintains optimism and advises investors to continue investing in India, considering its long-term growth potential and ongoing reforms.

In an interview with CNBC-TV18, Kim expressed his optimism about India, Japan, and Taiwan, which are currently experiencing a confirmed uptrend. However, he also cautioned against the possible impact of softening demand from China on India's growth trajectory.

He said, “The rest of Asia still holding up well. So, we have India, Japan, and Taiwan, they continue being confirmed uptrend, and Hong Kong and South Korea uptrend under pressure.”

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Talking about Nifty, Kim emphasised the significance of Nifty's 21-day moving average (21-DMA) as a crucial support level for the Indian market. The 21-DMA represents the average closing prices of the Nifty index over the past 21 trading sessions. Kim believes that this moving average acts as a strong support level for the Nifty index, providing a cushion during market downturns.

“The index is very strong, holding above the 21-day moving average. So, the 21-day moving average is going to act as a very strong support, and it's only 1 percent away, and should it fall below that then you have a rising 100-day moving average, that will act as support. So, India looks very constructive,” he said.

While talking about softening demand from China and its impact on India, he said that he remains optimistic about India's uptrend, he warns against the potential risks posed by softening demand from China. Given the interconnectivity of the global economy, any slowdown or decline in China's demand can have ripple effects on other countries, including India. China has been a significant trade partner for India, and any weakening of demand from the Chinese market could impact India's export-oriented industries.

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Despite the concerns surrounding softening demand from China, Dean Kim remains positive about the investment potential in India. He underlines the importance of a well-diversified portfolio that includes exposure to the Indian market. India's economic growth, rising middle class, and ongoing reforms make it an attractive destination for long-term investments.

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(Edited by : C H Unnikrishnan)