- McClellan Index continue to show positive progress and remains well above EMA(59) and MA(100)
- Nifty has managed to stay near HIGHs and MA(100) has managed to move back above MA(200)
- Market breaks through resistance zone - NO need to jump in right away, any breakout before election results will be contained and most likely will come back to test current levels, which would prove to be best time for lower risk entry.
- Market could NOT break through resistance and falls back into range - NO need to panic as market can remain in the wide range for months until election results are out. However, staying invested in equities does not offer any edge in this particular case.
- Market could NOT hold and breaks down significantly - A rare case but still a possibility. This will come as a surprise for many and once market drops below 5400 area panic will set in.
What does it mean for our Investments?
- Mutual Funds - If still invested in equities then stay put but be ready to pull the plug if market drops below 6000 level. If in debt/bond funds then keep an eye on it and DO NOT take a loss more than 8-10%. It might be better to stay in cash/FDs/Liquid Funds/etc.
- Stocks - ONLY invest in good patterns and never forget to have STOP LIMIT in place.
Market continues to show bullish character, however resistance might apply breaks...