As soon as market came near 6100 area, it was rejected promptly. This ONLY means that breaking through the resistance area is NOT easy. Is this the last chance to exit the equity market? What to expect next!!!
Not much has changed in below chart, as Nifty is still above MA(100), however MA(100) and MA(200) both are aligned and anytime now MA(100) can cross over MA(200) to downside (which is not a good sign), also McClellan index continues to grind lower suggesting possible downfall ahead for Nifty.
Rejection near 6100 area is clearly visible in below daily Nifty chart. Market might try to find support near MA(50) or MA(200) before dropping further to 5600 area.
Not much has changed on weekly Nifty chart, resistance (shaded area in red) is very evident and it appears that path of least resistance is to downside.
As expected market tried another attempt but so far NOT yet successful in breaking through the resistance area. This should NOT be a surprise to readers of this blog as we mentioned this few weeks back. Will this be the last attempt before the trend rolls over? As long as Nifty remains above MA(100), the benefit of doubt remains with BULLs. However the probability of rollover is HIGH.
What does it mean for our Investments?
Market is experiencing resistance and might roll over soon, be cautious...
What does it mean for our Investments?
- Mutual Funds - If still invested in equity funds then enjoy the bounce but be prepared to exit as soon as market drops below MA(100). If already out of market and in debt funds then nothing to worry, stay put as market is very volatile and no need to rush into any decision. If NOT sure what to do and not invested in any funds then remaining in cash is NOT a bad idea or park your money in liquid funds.
- Stocks - Take partial gains on open positions and have strict STOP LIMIT or trailing STOP on remaining position. Entering new positions might be risky unless the pattern is very convincing, however do not forget to have STOP LIMIT in place. In volatile times, its better to remain in cash.
Market is experiencing resistance and might roll over soon, be cautious...