Market is trying hard to stay at current levels, however it is finding it difficult day-by-day. Will this be start of the painful drop we have been discussing for months!!! ONLY time will tell...
Is below chart giving us any clues?
- Nifty back below MA(100) and MA(200) - Anytime Nifty dropping below MA(200) is NOT a good sign, also MA(100) is below MA(200) suggesting further downside is probable.
- McClellan Index well above EMA(59) - More stocks are advancing compared to declining in cumulative fashion which is a good sign, however lets not forget that price action dictates everything.
Daily Nifty chart is clearly suggesting that market is moving in a direction to complete our Head-Shoulder pattern shown below, which would mean that market will drop further to 8000 area and even to 7800 area.
Weekly chart appears to corroborate with daily chart as RSI is barely above 50 mark and PPO has dropped below zero mark.
It is very likely that we shall see further drop in the market to around 7800-8000 area before any attempt of meaningful bounce. All this should not be a surprise to visitors of this site as we have been expecting this drop for months. By our analysis, a final scary and panicky drop to 7200 area making everyone go bearish and drop the towel will be the ideal situation of lifetime for next BULL run which will be similar to 2004-2007 tripling the market.
Remember, this is a game of probability and NO guarantees, hence it is wise to be prepared than be surprised.
What does it mean for our Investments?
Market bears appear to be gaining, get out of the way...
Remember, this is a game of probability and NO guarantees, hence it is wise to be prepared than be surprised.
What does it mean for our Investments?
- Mutual Funds - If still invested in equities then time to make decision and if you do decide to stay invested then be prepared to feel the pain. No reason to continue SIP at this pont. If in cash/ FDs/ liquid funds then stay on sidelines.
- Stocks - ONLY invest in strong patterns with good earnings guidance and DO NOT forget to have STOP LIMIT on open positions. When market is in correction, it will drag everything down with it. Check out our trade size calculator to manage your risk along with potential buy candidates watch list.
Market bears appear to be gaining, get out of the way...