As expected, market momentum continued and anybody waiting for a meaningful pullback was left behind. Dilemma of should I get in now? and pain to watch this market go higher without me, adds to frustration, Isn't it! What should we do if we missed the rally so far? Should I just jump in this market!!!
No sign of weakness here, all signals are positive based on below chart.
- Nifty well above MA(100) while MA(100) remains above MA(200) and all are trending higher.
- McClellan Index rising well above EMA(59) suggesting more stocks are advancing than declining
Nifty gave us a minor pullback and resumed its journey higher, this would suggest that many were expecting a pullback and did miss this rally from early May. Market often does what most do not expect causing maximum pain.
On weekly chart, we can see market went sideways and we have a possibility of this market rallying to 9000 area in next 4-8 weeks, WHY? Once a momentum is established then nothing can stop it, think of it like a train in speed. Can it be stopped easily? NO, and without more acceleration, just based on initial speed and inertia it can travel quite some distance, Isn't it!!!
So now we are back to dilemma/confusion:
What does it mean for our Investments?
Market remains in strong bullish bias...
- Should we get in now?
- What if market takes a U turn?
- Can't watch this market going higher every day/week/month while we are still waiting to get in!
- DO NOT want to miss the rally which might be similar to 2003 to 2007
What does it mean for our Investments?
- Mutual Funds - If invested in equities then stay put and enjoy the gains. If in debt funds then continue to remain invested as well, as they will also provide gains. However, if in cash/FDs/Liquid Funds then you have a choice to make NOW. Invest 25-30% in an index ETF rather than mutual fund but have a STOP LIMIT just in case if this market takes a turn.
- Stocks/ETFs - ONLY invest in strong patterns and DO NOT forget to have STOP LIMIT in place.
Market remains in strong bullish bias...