Market bounced but the rally got capped at the gap resistance as expected. What will happen next? What is most likely scenario for weeks/months ahead? How can we be prepared for it?
What is below chart telling us?
- Nifty well below MA(100) while MA(100) below MA(200) - Correction underway, stay out.
- McClellan Index below EMA(59), EMA(59) below MA(100) - Correction confirmed, stay out.
Clear display of range bound action along with gap resistance near 8000 area on below daily Nifty chart.
Weekly chart giving us further clues regarding path of least resistance is on downside based on RSI below 50 mark, MACD trending down and PPO below zero mark.
All charts are hinting towards further downward action or at a minimum range bound action for couple weeks/months ahead. It is better to stay alert and if possible out of the market until situation changes.
What does it mean for our Investments?
Market in bearish mode, be alert and if possible stay out...
What does it mean for our Investments?
- Mutual Funds - If still invested in equities too late to get out unless you want to get out now while the bounce lasts, also you might as well ride the correction and be prepared to take the hit. No reason to continue SIP at this point. If in cash/ FDs/ liquid funds then it is wise to stay on sidelines.
- Stocks - ONLY invest in strong patterns with good earnings guidance and DO NOT forget to have STOP LIMIT on open positions. When market is in correction, it will drag everything down with it. Check out our trade size calculator to manage your risk along with potential buy candidates watch list.
Market in bearish mode, be alert and if possible stay out...