Market continues to find support and as a result we are experiencing wild swings. When can we expect this trend to reverse? How long will it take this market to get back on the BULL run?
What is below chart telling us?
- Nifty well below MA(100) while MA(100) below MA(200) - Both suggesting extreme caution.
- McClellan Index remains above EMA(59) while EMA(59) is above MA(100) - Both are positive signs.
Daily Nifty chart displays market attempt to bounce back but mostly staying in a range bound action with wild swings in both directions. We expect this behavior to continue for a while before the next decisive action.
Weekly chart is giving us a different story, market appears to be at support levels and could stay range bound for a while. Weekly RSI is NOT yet in oversold territory, however MACD is in downtrend and PPO remains below zero mark.
Based on chart, it appears that market may continue to remain range bound for some time before we get any decisive move. It is better to stay on sidelines for now and wait for next low risk entry.
Remember, the path of least resistance is on downside but that does not mean this market cannot change direction. Market will do what it wants to do, we need to be prepared for next market move.
What does it mean for our Investments?
Market in bearish mode, get out of the way...
Remember, the path of least resistance is on downside but that does not mean this market cannot change direction. Market will do what it wants to do, we need to be prepared for next market move.
What does it mean for our Investments?
- Mutual Funds - If still invested in equities too late to get out, you might as well ride the correction and be prepared to take the hit. No reason to continue SIP at this point. If in cash/ FDs/ liquid funds then it is wise to stay on sidelines.
- 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.
Market in bearish mode, get out of the way...