Market showed awesome recovery from beginning of this year and currently near ALL TIME HIGH. Where will it go from here? What should we watch out for and be prepared for!!! Are charts telling us anything?
What can we observe from below chart?
- A major bottom (shown by circles) in McClellan Summation Index is followed by a long term BULL rally (shown by green arrows) in the markets
- As long as market remains above/near MA(100), BULL trend remains intact
- After the initial rally, observe how McClellan Index pulls back near EMA(59) (Red line) (shown by dotted green lines) correspondingly market also experiences a pullback. After this action, market undergoes a massive BULL rally in coming months ahead
Based on above observation, we expect market to tag 8400 level and might come close to 61.8% Fibonacci level at 8200 area. RSI has touched oversold area but can remain in that state for a while before turning around. Also a good support exist around 8200 area.
Weekly chart also suggest a pullback as RSI remains in overbought territory, MACD appears to be crossing over and PPO is not making NEW HIGH.
We expect market to undergo a pullback or sideways action before making the next BIG move. Let's be patient and wait for the right opportunity for low risk entry. this would be an ideal time to research potential candidates for the next BIG move. If you do not have expertise to find potential good candidates then simply invest in index funds when the time arrives.
Let's not forget that nothing is guaranteed hence if market happens to drop below 7900 area then we have to be extremely cautious as this same pattern can turn into a DOUBLE TOP pattern which is considered bearish. We do not expect that scenario but its better to remain vigilant.
Market remains in strong bullish territory...
Let's not forget that nothing is guaranteed hence if market happens to drop below 7900 area then we have to be extremely cautious as this same pattern can turn into a DOUBLE TOP pattern which is considered bearish. We do not expect that scenario but its better to remain vigilant.
Market remains in strong bullish territory...