Wish you all a very happy & prosperous new year, be safe & content. Market has been wild after achieving NEW HIGH in late August of 2019 and appears to be recovering slowly. What should we expect as we roll into 2019?
By now we hope you are able to understand & identify:
Now lets look at below chart:
- Probability of a possible bottom (or top) so we can get aggressive (or cautious) based on PPO & RSI
- Low risk market entry based on reasonable rationale and not emotions using resistance & support levels
- Keep it simple
Now lets look at below chart:
- Market appears to be recovering but is below 100 day moving average (in red) hence be cautious
- 100 day moving average is above 200 day moving average hence the BULL is still alive
- McClellan summation index appears to be bottoming which means more stocks are advancing than declining which should help the market move higher but could take some time
Daily Nifty chart shows that 10000 area is a strong support area and market has managed to bounce twice so far. But also lets not forget, the more time any support area is tested the more likelihood of breaking it. Also if market manages to get above 11000 area then it has a good chance of nice rally ahead.
Weekly Nifty chart is not providing much clues and only validating what we see in daily chart. Market appears to be in neutral zone or what we call range bound action. We can also see a complex Head-Shoulders pattern formation and currently in process of forming right shoulder with neck line as 10000 support.
Charts are telling us following:
Geo-political global view:
In short, we expect few more bumps before we can get a good sustained rally. Its better to be cautious than be sorry, no need to jump in the market unless we see a definitive sign of rally & if we are already in the market then lets be on the guard.
Good Luck! & wish you a happy, safe & prosperous New Year 2019.
- Expect a possible rally above 11000 area
- Breaking 10000 support can cause lot of pain
- Watch out the complex Head-Shoulders pattern on weekly chart
Geo-political global view:
- US markets are undergoing wild swings due to government shutdown & trade wars, still not stable and can affect global markets
- Brexit & Euro zone issues can crop up
In short, we expect few more bumps before we can get a good sustained rally. Its better to be cautious than be sorry, no need to jump in the market unless we see a definitive sign of rally & if we are already in the market then lets be on the guard.
Good Luck! & wish you a happy, safe & prosperous New Year 2019.