Market has been range bound from beginning of the year after making New all time High. Where shall we look for signs?
All regular charts we observe are neutral and not providing any major clues regarding market direction. However weekly chart might provide subtle clues, let's understand if we can identify anything!
Above weekly chart clearly shows market is stuck in range bound action between 10000-12000, establishing strong support at 10000 and 105000 area but also has resistance in 11500-12000 area.
Observe the dotted oval long circles on the chart:
Observe RSI(5) at present, it is hitting overbought (above 70) region, now the question is can it remain in this territory or will it head down!!! If it does head down, will it spend more time near oversold (below 30) region or just touch n go? In coming weeks, this is what will determine if this market will continue the trend higher or remain range bound. As long as the market holds support level near 10000, nothing to worry for now. range bound markets can act as launching pad for the next major leg up so have patience and let market tell us its own story rather than we make up its story.
Market remains range bound for now...
Observe the dotted oval long circles on the chart:
- Nifty is trending higher marked by the circle with minimal pullbacks
- RSI(5) tend to remain overbought (above 70) in the trending market and spends very little or no time in oversold (below 30) territory
Observe RSI(5) at present, it is hitting overbought (above 70) region, now the question is can it remain in this territory or will it head down!!! If it does head down, will it spend more time near oversold (below 30) region or just touch n go? In coming weeks, this is what will determine if this market will continue the trend higher or remain range bound. As long as the market holds support level near 10000, nothing to worry for now. range bound markets can act as launching pad for the next major leg up so have patience and let market tell us its own story rather than we make up its story.
Market remains range bound for now...