Market was in overbought territory and now experiencing a pullback. But is this healthy action or something else!!! What provides us with a clue in regards to healthy pullback!!! Do you know?
Nifty weekly chart shows recent pullback action which appears to be very healthy, based on what?
- RSI is no longer in overbought level and bounced above 50 level suggesting nice action
- MACD above zero but appears to be crossing over suggesting a bit of caution
Nifty daily chart below shows a nice controlled pullback building a basing pattern. But is this healthy!!!
Below chart provides the real answer if this pullback is healthy. Number of stocks making new high is much more than stocks making new lows suggesting very healthy action which is also evident in number of stocks providing nice bullish setups.
Overview:
Market remains in strong bullish bias.
- Market is simply undergoing normal pullback so far
- Market internals remain healthy for now
- Festive season is ahead of us which might drive this market to another all time high soon
Market remains in strong bullish bias.