Entire month of January, market has been slowly grinding higher. Two steps forward and one step backward appears to be the theme. Where is market headed from here?
Did anything change in below chart?
- Nifty appears to be well above MA(100), however converging towards it.
- McClellan Index did cross EMA(59) from above BUT that itself does not signify trend change. However, it does provide us with a cautionary signal. This index measures how many stocks are advancing vs declining. Since the index is moving down, it suggest that more stocks are declining than advancing.
Below Nifty daily chart shows market is very slowing grinding higher and appears to be tired. It may continue this behavior or even pullback further towards current trend line from where it shall bounce.
On weekly chart, we can clearly see the theme of two steps forward and one step backwards and hence the slow grind higher. We have two possibilities from here:
- Nifty continues the current theme and reaches target area (more likely)
- Nifty pulls back or consolidate near this range and then start next grind higher
What does it mean for our Investments?
Market continues to be in bullish trend for now but be cautious...
- Mutual Funds - Continue to remain invested as no signs of worry so far, we may have cautionary sign but that is no reason to panic. Wait n watch, have patience.
- Stocks - Invest in right patterns and always have STOP limit in place. You can check our watch list here.
Market continues to be in bullish trend for now but be cautious...