Nifty is in all time high territory from last one month, but is this rally sustainable!!! Is this a false breakout or market internals are supporting it? Should we expect a pullback, if yes then to what levels!
Nifty weekly chart is providing some vital clues:
- MACD is trending higher and above zero mark suggesting good momentum behind this rally
- RSI however has reached overbought territory and suggest caution
Daily Nifty chart is already showing pullback is in progress towards 19400 area.
- MACD is already crossed over and turned down
- RSI has dropped from overbought territory
Nifty advance decline line appears to be going sideways suggesting we might get market pause for sometime.
Now that number of stocks above 50day and 200day moving averages has reached a saturation level, most likely they might start trending down which will result into market going sideways or pullback.
Nifty stocks making new high is impressive and remain healthy supporting current market rally.
Overview:
Market remains bullish and any controlled pullback shall be healthy.
- Market appears to have reached a saturation point hence a pullback or sideways range bound action can be expected
- MACD and RSI indicator are suggesting similar action
- Market breadth is also suggesting similar action
Market remains bullish and any controlled pullback shall be healthy.