Market appears to remain range bound and trying to find the support. Does it mean bottom is in? Or does more pain lies ahead of us!!! Let's take a look at charts for any clues...
Below chart is telling us two things:
- In top part of the chart, we can see Nifty well below MA(100) while MA(100) & MA(200) trending down - This is suggesting that market is in bear mode and further downside is possible.
- In bottom part of the chart, we can see McClellan Index is below EMA(59) and trending down - This is suggesting that more stocks are declining than advancing in cumulative manner.
Daily Nifty chart below suggest that either market is in process of forming a double bottom or trying to establish a support zone by remaining a range bound for a while.
Weekly Nifty chart is providing a better picture, as we can see that Nifty is trying to consolidate, which can also mean that market is taking a breather before trend continuation.
Charts are telling us that this market may drop further as we do not see any signs of reversal yet, however it can remain range bound for a while. Next support is near 6800 followed by major support near 6200 area. If this market does drop to 6200 area then it will complete a retest of previous breakout in early 2014 and will be the best low risk entry ever you can get for the Mega BULL market ahead.
What does it mean for our Investments for now?
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Take a look at our new service called "Quick Charts" which offers an easy visual way to look at daily and weekly charts of chosen stocks side-by-side. we hope it helps you in your research.
Market is bearish trying to find support...
What does it mean for our Investments for now?
- Mutual Funds - If still invested in equities then time to hold onto this roller coaster ride, exiting now will be very expensive and painful. No need to rush to start SIP unless we get positive trend reversal sign. 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.
Try out Service -
Take a look at our new service called "Quick Charts" which offers an easy visual way to look at daily and weekly charts of chosen stocks side-by-side. we hope it helps you in your research.
Market is bearish trying to find support...