After breaking MA(50) support, market managed to stage a bounce. However this time, MA(50) can act as resistance and NOT as support hence market will need bigger push to cross it. So where is market headed!!!
In last one and half month, market managed to stay between a narrow range of 150 points. From below chart, we can see that market is converging towards MA(100) which is something we will be watching. As long as it stays above MA(100) [red line] nothing to worry. Even McClellan Index is above EMA(59) suggesting no signs of worry for now.
The narrow range is clearly visible in below daily Nifty chart. Nifty managed to bounce last week and is right below MA(50) OR in other words MA(50) is acting like a resistance for Nifty to move higher.
Not much changes on weekly Nifty chart, it still appears as if market is following BULL FLAG pattern as shown below.
What direction is Nifty likely to take at this junction?
What about our long term Investments?
Stay focused and alert...
- Considering NO deal during Euro-Summit, we should expect more volatility ahead which in turn means world market will be dragged down
- Indian government is facing many issues such as FDI, Lokpal Bill, etc and inflation is out of control driving low investor confidence
- US fiscal cliff - Lot of talks and smiles BUT will congress strike a deal in time
What about our long term Investments?
- Mutual Funds - No signs of worry yet, hence stay invested and be patient
- Stocks - Invest in right patterns but remember if market is in correction then most stocks will fail to rise. DO NOT forget to have STOP LIMIT in place and manage your risk accordingly
Stay focused and alert...