How can more stocks advance when market is dropping?
Nifty Index components has far fewer stocks than entire NSE and hence it is absolutely possible. More stocks can manage to advance even though Nifty is dropping due to the fact that stocks in Nifty Index are declining but overall stocks in NSE are advancing. McClellan index is taking into account all the NSE stocks and not just Nifty Index components.
We hope this clarifies any confusion.
- Market heading into resistance near 8000
- As market makes higher highs, RSI and PPO are making lower lows also known as divergence
- MACD also rolled over
But below chart also suggest a possible support near 7550 area near MA(100), also watch RSI is very close to being oversold level which might provide enough conditions for a market bounce.
What does it mean for our Investments for now?
- Mutual Funds - If still invested in equities then time to sit tight, as we are on the cusp of turn around. No need to rush to start SIP unless we get positive trend reversal sign. If in cash/ FDs/ liquid funds then it is wise to stay on sidelines until we get confirmation. Be patient for low risk entry during the market pullback.
- Stocks - ONLY invest in strong patterns with good earnings guidance and DO NOT forget to have STOP LIMIT on open positions. When market is in correction, it will drag everything down with it. Check out our trade size calculator to manage your risk along with potential buy candidates watch list.
Try our Service -
Take a look at our service called "Quick Charts" which offers an easy visual way to look at daily and weekly charts of chosen stocks side-by-side. We hope it helps you in your research.
Market pullback underway, be cautious and alert...