Market is desperately trying to find support but due to Euro-zone events and national politics, it is being dragged down further. Greece elections are in next 2 weeks which might decide the fate of Greece to be part of Euro-zone. This clearly indicates lot of uncertainty in next few weeks and expect HIGH volatility with wide swings in the market.
What should we do in such scenarios???
What should we do in such scenarios???
Below chart shows how McClellan Index (bottom section) is very close to crossing the EMA(59) from above, also Nifty (top section) is below its MA(100) and MA(200) line. Both these indicate that we should be out of the market.
As can be seen from below weekly Nifty chart, the shaded area will act as support for Nifty. We might see several bounce attempts here but expect market to be very volatile until Euro-zone comes to some sort of settlement. However, if Nifty break below 4600 area then things might get very UGLY.
Below is Nifty daily chart, shows Nifty's 1st bounce attempt from 4800 level but it did not stick around for long. Even last time when Nifty was near 4800 level - September/October 2011, it tried to bounce. expect similar action this time and DO NOT fall into trap. Unless market proves that the bounce is for real we do not enter the market.
BUT how do we know that the bounce is for REAL?
BUT how do we know that the bounce is for REAL?
That's why we designed a system to guide us. If you have read earlier section then you will know when market turns around. Use this time to build your watch list of stocks which could be potential BUY candidates once market is ready to make its move. Every week we post a separate blog entry to show our watch list candidates. Understand why we identify these candidates as possible potential BUY candidates. Understand how to find such candidates so that you can do it on your own.
Thins to remember:
Stay alert and be cautious...
Thins to remember:
- Capital preservation should be our TOP priority
- Anytime market provides signals of correction then stay out of it until we get clear market direction
- Use this time to build your list of potential BUY candidates
- Avoid market traps, every bounce attempt does not indicate market trend change
- BE PATIENT
Stay alert and be cautious...