After a massive slide which started in mid May 2013 and spilled over in June, Nifty managed to bounce halfway through. However we are NOT out of the woods and every step higher will be met with resistance. BUT WHY?
What can we learn from below chart?
- McClellan Index continues to drop further suggesting more number of stocks are declining while less number of stocks are advancing, NOT a good healthy sign of a rising market
- Nifty is in the vicinity of MA(100) and MA(200) and it appears as if MA(100) may cross over MA(200) which is NOT a good sign either
It is clear from below chart that MA(50) can act as resistance for Nifty.
Not much has changed in weekly Nifty chart, if BULLs are able to push Nifty higher then we might see Nifty touch 6100 area again.
No matter how you slice and dice the data or charts, current environment remains volatile with wide swings on either sides. Market is NOT providing any clear direction and doing its job of confusing us beyond reasonable doubt. Wise thing to do is to wait and watch until we get clear direction before reaching any conclusions.
What does it mean for our investments?
Market continues to remain under pressure, hence be cautious...
What does it mean for our investments?
- Mutual Funds - If you are still invested in the market then enjoy the bounce until it lasts as this might be the last chance to get out. If you are already invested in debt/bond funds then no worries, stay put and wait for market to settle and provide a clear direction. If you are in cash then you may want to park your money in liquid funds until you make your decision.
- Stocks - It might be wise to stay in cash, take partial gains on open position while have strict STOP LIMIT on remaining positions. No need to invest in turbulent times and capital preservation should be our TOP priority,
Market continues to remain under pressure, hence be cautious...