Due to Euro zone worries, markets across the globe are experiencing correction. To add more pain, Indian governments Mauritius tax treaty comments pushed the market further down. How far down the markets will continue to drop before we see a turn around!!!
It is evident from below chart, as market broke the support of MA(100) and MA(200) it dropped quickly.
Below shaded area in the chart represents support area (range 4600-4800), market will most likely spend few weeks near this area. Depending on the Global macro-economic events, next market direction will be decided. For now market remains in correction mode.
Few things to remember when market is in correction:
- Wait for market to show signs of trend change
- DO NOT try to bottom fish stocks unless you have the right skills and good risk management strategy
- Have patience till market provides some form of trend change confirmation
- This is ideal time to research and identify stocks/funds which could be possible BUY candidates and could provide nice returns when market turns
Stay alert and be cognizant of global macro events as it affects our markets and economy drastically....