Nifty: No surprises here, Support still unclear...

Nifty is still trying to find support. It is unclear if it will hold support near 5550 area or will it close the gap at 5450 area. What do you think?

Not much has changed in below chart, Nifty continues to remain below MA(200) while McClellan Index continues to drop harder. At some point, Nifty will bounce from oversold levels and we shall see McClellan index slows its drop down and start moving sideways.

It is clearly evident from daily Nifty chart below that Nifty is trying to create support near 5550 area shown by dotted line. However, Nifty can decide to close the gap at 5450 area and bounce from those levels.

On weekly chart, Nifty continues its journey downwards.

What does it mean for our Investments?

• Mutual Funds - If invested then hold your positions, as mentioned earlier next bounce will be our chance to exit the markets.
  
• Stocks - Invest ONLY in convincing patterns and always have STOP LIMIT in place. This is the best time to identify next potential candidates and create a watch list, if possible stay in cash.

Market in correction mode, stay cautious...