HAPPY DIWALI to all readers of this site, and wish you a prosperous, safe & successful new year ahead. Although, everyone of us always try to do best for our families, this year lets make a conscious effort to perform an act of random kindness and make someone else's life better.... :-)
Market is close to all time high and everyone seems to be happy due to festive season. Does it mean we shall expect a massive rally from this point on-wards!!! OR Will this be repeat of 2010 Diwali!!! What do we need to watch for?
Market is close to all time high and everyone seems to be happy due to festive season. Does it mean we shall expect a massive rally from this point on-wards!!! OR Will this be repeat of 2010 Diwali!!! What do we need to watch for?
Not much has changed in below chart:
- McClellan Index continues to rise suggesting more and more stocks are advancing than declining which is a good sign
- Nifty is well above MA(100) BUT MA(100) is still below MA(200) which is a bit of a concern, however if Nifty continues to rise eventually MA(100) will move above MA(200)
Below daily chart clearly shows that Nifty is in resistance zone and will require significant push higher to break through it.
Not much has changed on weekly chart below, but watch the circular shaded areas especially one in Oct 2010. Can you see a huge RED bar immediately after market made a new high on Diwali 2010!!! Next week will be crucial, if we get a huge RED bar then this move is suspicious. ONLY time will tell....
It might be bit difficult to see below chart, its a longer term weekly NIFTY chart. Lets see if you can figure out what we have identified in below chart!!! Do provide us your opinion as to where do you see this market headed but with appropriate reasoning and NOT mere prediction on HOPE.
DO NOT worry of loosing any massive rally ahead of us. Even if this market breaks out of the resistance zone, it is highly likely that it will come back to test this level again before starting any major BULL market. Another scenario could be that it breaks out attracting more investors, which will end up being a BULL trap and then fall back below current level. We believe that this market is going NO WHERE before 2014 election results are out and smart money will try to keep it in a tight range until then, unless global macro forces come into play.
What does it mean for our Investments?
Market appears to be bullish but be cautious...
What does it mean for our Investments?
- Mutual Funds - If invested in equities then stay put but be ready to pull the plug. If invested in debt/bond funds then keep an eye on them. If invested in CDs or liquid funds then wait for next opportunity as entering markets now is a bit risky.
- Stocks - ONLY invest in convincing patterns and DO NOT forget to have STOP limit in place.
Market appears to be bullish but be cautious...