Market showed a orderly pullback in month of September, BUT will this turn into a correction? Lot of activity in political arena these days and implementation of promises by new government appears to be on the horizon. How does it affect markets & Where is this market headed!!!
Not much changed in below chart:
- Nifty continues to be above MA(100) while MA(100) is above MA(200) - suggesting bullish bias, however distance between Nifty and MA(100) is reducing which indicates pullback or sideways action
- McClellan Index although above EMA(59) is going flat - suggesting more stocks are NOT advancing compared to unchanged or declining stocks
Pullback is visible in below Nifty daily chart and market is trying to find support at MA(50). The next support is near 7500-7600 area followed by MA(200) near 7100-7200 area. If MA(50) support breaks on good volume then we shall see some choppy action in near term, however we could get drop below MA(50) with a immediate bounce just the way it did last time.
On weekly chart, we can see that market is barely hanging onto WMA(10) line.
Market is trying hard to remain in bullish channel and continue the rally but due to weakness in emerging markets, it is getting dragged. The long term trend remains bullish however in short term next 1-3 weeks will determine market direction.
What does it mean for our Investments?
Although overall trend remains bullish be cautious...
What does it mean for our Investments?
- Mutual Funds - Remain invested in equities as we don't see any major signs of weakness yet, hence also continue SIP. Opening new positions could be risky unless we see a bounce above 8050 area, so be patient.
- Stocks - ONLY invest in good patterns, as very few stocks are showing low risk entry. DO NOT forget to have STOP LIMIT in place. Check out our trade size calculator to manage risk along with our watch list.
Although overall trend remains bullish be cautious...