Nifty and Sensex are in a corrective mode ever since hitting levels close to 20k. ( 19991 to bre precise) Nifty crossed its previous all time high of 18900 and went to the above quoted levels. After such a sharp rally, I think some amount of cooling is expected and desirable. The whole previous rally from 16800 to near 20k has been viewed skeptically by a lot of market participants. And bull markets thrive on skepticism. We are into the fourth week of correction in Nifty and hardly give up 5% from the top.
And while the overall markets are correcting, the small and midcaps are having a good time. Someone who has been sector specific and stock specific has had a good time. Many stocks in specific sectors, e.g PSU and PSU banks are holding out all right. In fact in past few days, there has been a sharp rally in the smaller PSU banks like IOB, JK Bank, Central Bk , MahaBank, UCO bank, just to name a few I track. If markets were in sharp corrective mode, usually everything falls. But in our markets its not so. So I think this is a routine correction, maybe a well deserved rest for an overheated Nifty and Sensex.
How this correction pans out and if and when it completes, is a matter of conjecture. I usually am not too fond of forecasting overall markets as I have seen very few people get it right consistently. Its much more easy to find out individual patterns in charts and check fundamental triggers and then take positions, and still if there are those (routine) corrections in these names , then so be it.
I do not follow the methods and ratios followed by Nooresh Merani. So not much idea about it. But having followed him through his writing, I think he has a very good track record of catching market turns and he does it in uncomplicated ways with lot of sensible logic.
GAIL chart pattern I discussed before also. It has broken out of a strong resistance band and now retesting that breakout zone. Sometimes, these corrections go slightly deeper and longer than expected. For stocks that have broken out of strong resistances, the simple moving average to follow for near term is the 10 WEMA. And then for longer term, the 30 WEMA. I don’t have any predecided stop losses in GAIL but as long as the structure appears okay, I would hold on.
@Anurag_Agnihotri I don’t track UPL or LIC.
@SAGHOS01 Bajaj finance chart you put up clearly shows it is range bound between levels approximating 5500-8000 In fact one can draw a symmetrical triangle on weekly charts. Any major move could come about once it breaks out of this broad range or from triangle.
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