Much awaited Budget was declared which resulted into market sell-off and ended up being profit booking event. Will this cause the market to pullback significantly and provide a better buying opportunity!!! What shall we expect in weeks ahead?
Nothing changed in below chart:
- McClellan index is well above EMA(59) and trending higher
- Nifty also remains well above MA(100), while MA(100) remains above MA(200) suggesting strong bullish bias
Nifty although in pullback mode is very close to MA(50) and has a potential to find support at MA(50). A sideways action is healthy for this market to continue its BULL rally. However if MA(50) support is broken then we may have a correction at hand.
Weekly chart suggest a change in market character, displaying bearish engulfing candle pattern. Usually such a pattern suggest further weakness ahead hence it is better to be cautious.
If market can hold near 7300 area and exhibits sideways move then it will be very healthy for this BULL rally, however if profit booking continues then market could experience a significant pullback to 6500-6800 area. In other words it will scare most average investors, BUT will provide an awesome opportunity for anyone who was waiting patiently to enter this market. For now it is wise to stay cautious and alert.
What does it mean for our Investments?
Market in pullback which can be healthy for BULL run...
What does it mean for our Investments?
- Mutual Funds - Stay invested in equities and continue with SIP as we do not see any signs of market crash ahead as of now. If in debt funds then as long as you are making gains then stay put else have a exit plan at hand, do not extend losses beyond 8-10%. If in cash/FDs/ liquid funds then wait for right entry, this correction/pullback will be your friend and will provide you with right opportunity at right time. Remember, patience pays off hence use this time to do your homework and research.
- Stocks/ETFs - ONLY invest in strong patterns and always take partial gains once your position makes more than 30-50% gains. Use our trade size calculator to manage your portfolio risk as well as check out our watch list (we update our watch list towards end of the weekend).
Market in pullback which can be healthy for BULL run...