SM: Oversold Bounce or Turnaround

[Deepak Singh]

Read State of the Market Blog - http://www.stateofthemarket.net/blog/

 

Up, Up Up….oh No - Down, Down, Down- that’s the phase we are in. Price on the screen is going to drive the traders behaviour. FIIs and DIIs are locked in intense battle and chartists are caught in cross fire - trying to make sense out of situation that does not make much sense.

Technically, this market is sell on rally because Nifty is trading below 50 dma of 5107 and 100 dma of 5015. Nifty is also trading below 20 week ma which has held on for a long period of time. So, now these levels may act as resistance on rally. That’s what the theory says…..and hence current rally can be only called as oversold bounce…till market moves above these moving averages and prove otherwise.

Market Observations

1. The job of a correction is to test the conviction of market participants by inflicting maximum pain to maximum people
2. The big question: Has market done that in last couple of weeks? The answer is No.
3. Do not take your eyes off 200 dma on Nifty that currently stands at 4615
4. I am not optimistic on market because of the nature of sell off but market does not care what I think. It will do what it has to do and that includes doing opposite of what I think 
5. Yesterday, I shared my market observations on NDTV Profit in 2:30 Factor Show.I will try to upload the video soon. It was a great experience doing a live show.

Read the complete observation - http://www.stateofthemarket.net/blog/?p=11517

 

Cheers

Deepak Singh