After a drastic decline in the beginning of this year, market appears to be consolidating before making the next move. Can we identify the next probable move? What clues shall we look for market turn around? Lets get prepared...
Market remains below MA(100) and hence vulnerable, however McClellan Index is barely hanging above MA(59) which is trending down. All signs are suggesting to be very cautious as further downside cannot be ruled out. A bounce can take this market near MA(100) or continue to go sideways until MA(100) catches up.
Daily chart shows that market is consolidating in a small range between 7300-7600 area. Check the RSI which has managed to get above 50 mark and can soon reach over bought area above 70 mark, however underlying market is not improving.
Weekly chart remains firmly bearish, long tails on recent bars suggest a possible reversal bounce in weeks ahead.
Overall market conditions are bearish, although we might get a bounce or consolidation action in near future, path of least resistance remains on the downside.
What does it mean for our Investments for now?
Market taking breather but remains bearish, stay alert...
What does it mean for our Investments for now?
- Mutual Funds - If still invested in equities then time to hold onto this roller coaster ride, exiting now will be very expensive and painful. No need to rush to start SIP unless we get positive trend reversal sign. If in cash/ FDs/ liquid funds then it is wise to 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 taking breather but remains bearish, stay alert...