It appears that that volatility is seeping into the market and as result market is having hard time. As long as, market remains in the channel then benefit doubt goes to bulls. What can we expect in near term!!!
Market is finding hard to stay above MA(100), however technically it is still above MA(100). McClellan Index is below EMA(59), however it is flat and not trending down.
Nifty daily chart shows that market was unable to hold above MA(50), will it drop out of the channel and towards MA(200) or bounce back from the channel bottom trend line remains to be seen.
Weekly chart provides some more information. RSI has managed to stay above 50 mark, however the divergences are intact.
Usually when volatility increases that is a sign of fatigue in the markets suggesting lot of zig-zag moves ahead of us. If market drops out of the channel then first support is near MA(200) around 8200 area. Only time will tell if the divergences on weekly chart will result in market meltdown.
What does it mean for our Investments?
Market bulls get benefit of doubt again...
What does it mean for our Investments?
- Mutual Funds - If already invested in equities then stay put. If in cash/FDs/liquid funds then wait for market to stabilize a bit before entering, however if the bullish channel is broken then all bets are off.
- Stocks - ONLY invest in strong patterns with good earnings guidance and DO NOT forget to have STOP LIMIT on open positions. Check out our trade size calculator to manage your risk along with potential buy candidates watch list.
Market bulls get benefit of doubt again...