We wish all our readers a very happy, safe, prosperous and successful New Year ahead. Let's be knowlegeable by being informative and make smart decisions regarding our investments.... good luck!
Now let's get back to markets, what shall we expect the market is going to do from this point forward! Is it establishing a base and will this start the next BULL run!!! OR will this turn into further drop and pain ahead!!! Lets take a look at charts...
Now let's get back to markets, what shall we expect the market is going to do from this point forward! Is it establishing a base and will this start the next BULL run!!! OR will this turn into further drop and pain ahead!!! Lets take a look at charts...
In our past couple of blog post, we have been saying that this might be the best opportunity of lifetime to invest in the markets similar to one we had during 2004 after which market trippled in three years. We also provided enough evidence to make our case, however lets not forget that market does what it wants, so lets stay humble.
Below chart is giving us subtle clues:
Below chart is giving us subtle clues:
- Market is establishing base and as soon as it moves above MA(100), that wud be the sign to get in the market.
- McClellan Summation Index has dropped below EMA(59) but we believe this is just a shakeout move before the next giant move up.
Daily Nifty chart is providing much better signs of why we believe this market is establishing base.
Observe important divergences:
Observe important divergences:
- Market making lower low, very visible that low in December is lower than low in November
- PPO, RSI and MACD forming higher low causing perfect divergences
- The same thing happened earlier this year in February and we can see the outcome
Items to watch on weekly chart in coming weeks ahead:
- RSI shall move above 50 mark as market moves up
- PPO shall move above zero mark
- MACD will turn back up
What did we learn from charts?
Market turning point appears to be near, no need to jump right away. Sometimes its better to play it safe than be sorry. But once we get confirmation then DO NOT wait as you DO NOT want to miss this BULL train. If this market does follow in the foot steps of 2004-2007 then it will triple from 6000 level to 18000 level which means it can double at a minimum from current levels. All we need is market to move back above MA(100) and McClellan Index to get back above EMA(59), however only 1st condition is enough for confirmation.
Let's say thing dont work out the way we expect and market drops further. If we lose 7600 area support than market may get stuck in a wide range from 6800-9000 level for months/years to come. Its very difficult to tell what may happen at this point.
Hence better to stay vigilent and cautious, be smart and informative.
What about my investments?
Market establishing base, stay cautious and aware...
Market turning point appears to be near, no need to jump right away. Sometimes its better to play it safe than be sorry. But once we get confirmation then DO NOT wait as you DO NOT want to miss this BULL train. If this market does follow in the foot steps of 2004-2007 then it will triple from 6000 level to 18000 level which means it can double at a minimum from current levels. All we need is market to move back above MA(100) and McClellan Index to get back above EMA(59), however only 1st condition is enough for confirmation.
Let's say thing dont work out the way we expect and market drops further. If we lose 7600 area support than market may get stuck in a wide range from 6800-9000 level for months/years to come. Its very difficult to tell what may happen at this point.
Hence better to stay vigilent and cautious, be smart and informative.
What about my investments?
- Mutual funds - Stay invested if you are already in market else wait for confirmation. NO need to STOP SIP for now unless market drops further.
- Stocks - This might be best time to identify right stocks which can move 100% to 1000%. Over the years we have shared many techniques, hopefully you have been taking notes and using them for your own benefits.
Market establishing base, stay cautious and aware...