Two weeks can make significant difference, Isn't it! Market rallied back to OLD HIGHs due to severe intervention from RBI and also as US FED announced their decision regarding easy money. BUT now we are back into resistance zone where market was rejected twice. Will third time be any different? What shall we expect ahead...
Not much has changed from last time, the pattern is very similar to what we saw in late 2011. Unless market makes a BIG and convincing move above 6300 level, we shall stay on the sidelines. Trend change occur over a period of time and typically volatility tends to increase during those periods.
Market is back into resistance zone (shown by RED shaded area). Expect lot of volatility at these levels and stay on the sidelines for now.
Not much has changed on weekly chart, market hitting against strong resistance area.
Market is up against overhead resistance where it was rejected twice. Unless it crosses this resistance area, investors DO NOT have any edge to remain invested and take all the risks at these levels. However, market is back above MA(100) line on daily chart hence it gets benefit of doubt on BULL side. The best route would be to stay out of the market until we get a clear direction.
What does it mean for our Investments?
Market is still trying to establish clear direction, hence be cautious...
What does it mean for our Investments?
- Mutual Funds - If you are still invested in equity markets then next few weeks are crucial, be ready to exit your positions if market is unable to hold near current levels and falls below MA(100). If you are in debt/bond funds then keep an eye on them especially in current volatile environment. If in liquid funds or cash then stay put and wait for clear direction.
- Stocks - ONLY invest in convincing patterns and DO NOT forget to have STOP LIMIT in place.
Market is still trying to establish clear direction, hence be cautious...