We got the bounce and market managed to close the gap. How far will this rally continue? What to watch out for?
Key elements to watch in below chart:
- Nifty still below MA(100) while MA(100) trending below MA(200) - suggesting to observe caution, Nifty needs to get above MA(100) for this correction to be considered as over
- McClellan Index well below EMA(59) - suggesting more stocks are declining than advancing on cumulatively basis
So far our speculation appears to be on target, so lets watch what happens in next two weeks. Watch RSI which is barely touching overbought line.
Weekly chart has not changed much.
Market appears to be working out oversold conditions and hence we got the bounce, however sustaining the bounce will not be easy. Its better to remain cautious for now.
What does it mean for our Investments?
Market still bearish, stay cautious...
What does it mean for our Investments?
- Mutual Funds - If still invested in equities then watch if market can sustain this rally. No reason to continue SIP at this point unless we get some confirmation. If in cash/ FDs/ liquid funds then it is wise to wait for next low risk entry.
- 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 still bearish, stay cautious...