- Nifty is still above MA(100) and MA(200), however it is converging towards MA(100). Also MA(100) and MA(200) lines are getting closer suggesting lot of zig-zag action in weeks/months ahead
- McClellan Index in bottom portion of the chart appears to be moving horizontally but might soon start dropping further
- Market may try and find support near MA(50) area but we won't be surprised if it cuts through MA(50) and finds support near MA(200)
- A quick bounce back to 58xx or 59xx area and try to hold it for few days but it will be difficult
- Continue its journey downwards to 5550 area and try to establish support. However, it may not be surprising to see that the market cuts through this support very quickly and takes a deeper plunge
- At this point, market will be in confirmed down trend
What does this mean for our Investments?
- Mutual Funds - Stay put and wait for market to show us its next move. We do not have to time the TOP but just need to know the opportunity window to exit the market, hence it is wise to be alert and start working on your exit strategy.
- Stocks - Unless you have a very convincing pattern, take partial gains and have a strict STOP LIMIT in place.
Market could be in transition phase hence be cautious and stay alert...