Market experienced a nasty pullback in past few days, wiping out all the gains from late November 2013. Where is this market headed? Will it be able to break through resistance zone!!!
Nifty dropped below MA(100), however it is still above MA(200) suggesting to remain cautious. McClellan index is well above EMA(59) and MA(100), however it has turned and currently flat which also suggests caution.
Nifty bounced at support near MA(200) and might be trapped between MA(50) & MA(200) for a while before making next move.
A long bottom tail on the last bar in below chart suggest a possible bounce ahead.
Emerging markets are having trouble as easy money from US FED is being pulled back (reduction in QE3). If this continues in coming months then expect further downside and probable start of BEAR trend. Also as suggested earlier, this market will NOT start a massive BULL rally until election results are out. Hence its better to protect your capital until we get a decisive market move.
What does it mean for our Investments?
Market in pullback mode, be cautious...
What does it mean for our Investments?
- Mutual Funds - If still invested in equities then be ready to pull the plug as soon as this coming bounce stalls. If invested in debt/bond funds then keep a watch on them and DO NOT take a loss more than 8-10%. For now it might be best to stay in FDs/Liquid Funds/cash.
- Stocks - ONLY invest in strong patterns and DO NOT forget to have STOP LIMIT on all open positions. You can check out our watch list here.
Market in pullback mode, be cautious...