We expect market to spend couple of weeks in the range between 7700-8000 area and then make the next directional move. Most likely the next move will be on the down side, however it can also form a W-pattern on weekly chart which will prove to be very bullish for the next BULL rally.
Remember, market often sucks in more money before it makes that wrong turn. Hence, we will look at other clues to identify when the real turn happens and our charts will provide us enough clues to form a consensus.
What does it mean for our Investments?
- Mutual Funds - If still invested in equities then time to bear the pain until we see a market turn around. No need to rush to start SIP unless we get positive trend reversal signs. 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 remains in bearish trend...