Almost a week since my last update, but then I have decided to take things lil easy. Market has not shown signs of a major reversal to the upside yet….we may say we might bounce back and we may give a thousand reasons why we would tank or why we would not tank, but for a technical trader, he just has his chart a few intelligent interpretations of a few probabilities, and then he has his final weapon; THE STOP! That’s all about trading technicals….belief in your charts, conviction in your analysis, courage to follow your convictions and finally admit if and when you are wrong, the stop takes care of the last part!
What you see above is a daily chart of CNX 500, a much broader index than Nifty. As you can see that it’s already below the 200 periods MA and tryin2reclaim it! Yeah Nifty is trading above the 200 so far…but then if you look at your other major indexes, most of them are trading below the 200, barring the IT index. So the big question is; Nifty above 200 periods MA when all other indices are trading below 200, is an anomaly???.
An oversold bounce from here is always a possibility, but for any signs of trend reversal, I would rather wait for the “old school” lesson; I would want to see a higher low to begin with and then perhaps a Higher High!!!
Till then one can trade swings based on hourly charts and make sure you are kinda strict with you stops!
Btw I just remembered a song; Que Sera Sera…whatever will be will be…the future is not ours to see…Que Sera Sera!!!