What is the below chart telling us!!!
- Market was in downtrend and seems to have changed the trend in mid January.
- We can see this in below chart as nifty (blue line) is crossing its 100 day moving average (red line) upward, also the McClellan Summation Index is crossing its moving averages. This is initial sign of trend change.
- Market continues to move higher and crosses 200 day moving average (orange line), this is a confirmation that market may have finally changed the trend.
- From mid February, market is in small correction mode also known as pullback. This is actually good for and healthy for BULL market. In fact this might provide us with the buying opportunity. Once the dotted line is broken by the market upwards, that would be the time to get in the markets either by investing in mutual funds or stocks.
- The trend continuation can continue for several months before next major correction.
How do we go about selecting Mutual Fund or for that matter right stocks to get in!!!
- We will cover this in our next post over the weekend
- For stocks take a look at our "Stocks - Simple Approach" which should provide some insight
Remember, capital preservation should be our TOP PRIORITY ALWAYS. Right timing is critical to success in stock market.