Market continues to remain near recent HIGHs, however vulnerable to further downside BUT WHY? What should we be prepared for and expect in weeks ahead...
Not much has changed in below chart and all signs continue to support bullish trend. BUT that does not mean, market cannot experience a correction hence we need to be alert.
- Nifty well above MA(100)
- McClellan Index well above EMA(59)
Mega phone pattern shown by dotted black lines is playing out in chart below. As we can see a pullback towards MA(50), soon we shall know if the MA(50) support remains in place. The break of MA(50) support can take market further down towards 7200-7400 area and could lead to a further shakeout phase.
As long as market remain above WMA(10) and does not breakdown, NO need to worry. If it does breakdown then it has a potential for a shakeout correction which will setup the next low risk opportunity.
Based on charts above, it would be wise to not open new positions and have strict STOP LIMIT on existing open positions. No need to stop SIP unless market drops significantly (approx 6500-6800 level) but before that we shall see plenty of warning signs.
What does it mean for our Investments?
Market remains bullish however might experience pullback....
What does it mean for our Investments?
- Mutual Funds - If invested in equities then stay put however be cautious. If in cash/liquid funds/FDs then stay put and wait for next low risk entry. Do keep an eye on debt funds and DO NOT take more than 8-10% loss, cutting losses is essential part of investment.
- Stocks - ONLY invest in strong patterns along with STOP LIMIT for every open position. Use our trade size calculator to identify your risk per position at portfolio level.
Market remains bullish however might experience pullback....