At the beginning of last week, market was at critical junction sitting right at MA(50) and MA(200) support. It briefly dipped below the support and bounced back as expected. For now, market remains in UP trend but for how long and how far will it go!!!
Looking at below chart, 1st thing that grabs our attention is that Nifty crossing MA(100) line multiple times in past month. This happens especially when market experiences volatility, however McClellan Index remained above MA(59) indicating possible trend continuation. Hence during such times we DO NOT conclude/act immediately regarding our long term investments but wait for possible confirmation.
What would constitute confirmation of Market trend reversal?
What would constitute confirmation of Market trend reversal?
- Nifty falling below MA(100) & MA(200)
- McClellan Index falling below EMA(59)
A clear bounce by Nifty at MA(50) & MA(200) support lines suggest possible trend continuation with a target of 5300 level in near term.
On weekly chart below, Nifty exhibits a new UP trend channel (shown by green lines). Break of the dotted line could push Nifty to 5600 area quickly.
How long the trend will continue?
As long as -
Provided all above continues to happen, we might see this trend continuation for couple of months before market will tank, ONLY time will tell.
Enjoy the party till it lasts...
As long as -
- Euro-zone debt issues remain under control (OR at least they make world believe it is under control)
- No Euro-zone country leaves Euro or comes near "default" event
- US job growth continues
- Indian Government DOES NOT modify policies to hamper foreign investments and keeps inflation in check
Provided all above continues to happen, we might see this trend continuation for couple of months before market will tank, ONLY time will tell.
Enjoy the party till it lasts...