Market has finally managed to make a new HIGH, but can it keep going at this pace! Is this the right time to get in or get out? What is the best possible outcome at this juncture!!! What should we be prepared for?
Can we learn something from history as shown in below chart?
Lets look at following:
Lets look at following:
- 1st dotted rectangle - Market kept going higher even though McClellan Index kept falling
- 2nd dotted rectangle - Market started chopping around and could NOT hold eventually
- 3rd dotted rectangle - The moment it dropped below MA(100) & MA(200), it could not regain its strength and continued the downtrend
A brief pullback by Nifty and back to making new HIGHs.
The red shaded area signifies possible resistance zone where Nifty might spend couple of weeks n zig-zag manner.
What does it mean for our Investments?
Market continues to remain bullish for now...
- Mutual Funds - Stay invested as long market continues to remain above MA(100) but opening new positions at this juncture could be risky.
- Stocks - Invest only in strong patterns, take partial gains on open positions while having trailing STOP on remaining position. DO NOT forget to have STOP LIMIT in place.
Market continues to remain bullish for now...