Market has managed to stay in a narrow range (for last two weeks) after breakout to ALL TIME HIGH earlier this month, in short it is digesting recent gains. Elections are getting closer by the day and lot of news is coming out. Will it provide a direction to this market? What can we expect in near term!!!
Not much has changed from last time:
- Nifty remains well above MA(100) and MA(200) suggesting bullish action
- McClellan Index is above EMA(59) & MA(100) and appears to be inching higher, also bullish for the market
Consolidation near HIGHs is always a sign of bull flag formation which is typically followed by another leg higher.
We can see the consolidation near HIGHs on weekly chart as well.
In near term, it appears that market is gathering strength for the next leg higher and break of this consolidation could take it to 6800-6900 level as per probability model. But lets NOT forget, we are in election season and once the results are out then things can & will change dramatically in NO TIME. Also Ukraine issue is NOT resolved and has potential into becoming major problem on world stage. DO NOT jump into markets just because it is at ALL TIME HIGH, low risk entry is absolutely essential for staying in the game. As mentioned earlier, we believe that no matter how high this market goes, it will come back to test 6400-6500 level before starting any major BULL market.
What does it mean for our Investment?
Market continues to be bullish for now...
What does it mean for our Investment?
- Mutual Funds - If invested in equity markets then stay put until we see any signs of danger. If in debt funds then keep an eye on it and DO NOT take a loss more than 8-10%. If in cash/liquid funds/FDs then stay put until elections are out of the way.
- Stocks/ETFs - ONLY invest in strong patterns with STOP LIMIT in place.
Market continues to be bullish for now...