Market has absolutely done nothing in last three months except choppy performance. It made a NEW HIGH during Diwali but failed to breakout successfully. As of now it sits inside resistance zone and not providing directional change anytime soon. What does it mean for us?
Bullish signs in below chart remain consistent:
- Top portion - Nifty well above MA(100) & MA(200) while MA(100) remains above MA(200) suggesting bullish bias
- Bottom portion - McClellan Index is well above EMA(59), while EMA(59) is well above MA(100) confirming bullish case
Nifty appears to have been trapped inside the resistance zone from Oct 2013, showing no sign of change so far.
Not much changed on weekly chart as well.
Where is all this leading too?
Various Scenario -
What does this mean for our Investment?
Market maintains bullish bias but be careful...
Various Scenario -
- Breakout: If at all this happens before election results then expect a pullback to 6400 level, hence NO reason to worry about missing any rally
- Drop below resistance zone: Very likely but as long as Nifty remains above 5500 area, NO reason to panic
- Meltdown: Drop below 5500 area, a remote possibility before election results but again NOT an immediate worry as we shall get enough signals before the actual event
What does this mean for our Investment?
- Mutual Funds - As suggested earlier, if invested in equities then stay put but be alert. If in debt/bond funds then keep an eye on them. Staying in liquid funds/FDs/cash appears to be best option for now.
- Stocks - ONLY invest in strong patterns and never forget to have STOP LIMIT in place. Check out our Watch list here.
Market maintains bullish bias but be careful...