Market managed to come back in what seems like an almost V-shape recovery. Last week provided the confirmation and it is very probable that market may continue higher for next 5-7 weeks. What does it mean for us? BPNYA is rising, however it would take sometime to catch up with EMA(30), however Volatility ($VIX) is backing off which helps the market to move higher steadily. NYSE managed to break through the MA(50) resistance, however earlier broken trend line can act as resistance and a pullback to MA(50) would be healthy for this rally. Weekly chart provides a very unique picture. Check the second last bar on the right with a long bottom tail. It almost touched the dotted support area which tells us pay attention to "tails". However, divergence between Price and MACD, RSI is still very much in play suggesting caution. NYUD chart below confirming the bounce as mentioned in last blog post, the key thing to watch in coming weeks will be to see if NYUD rises above earlier peak high. If it cannot take over the earlier peak high then the rally might be under pressure and might be near the end. We will know the outcome in next 2-4 weeks ahead. Current market scenario are giving mixed signals:
1. On NYSE weekly chart we see the divergence between Price and MACD, RSI 2. NYUD bounced off EMA(21) suggesting possibility of market moving higher, however if NYUD is unable to move higher beyond earlier peak high then expect rough road ahead 3. BPNYA is recovering and below EMA(30) Probability of market moving higher appears to be favorable, however we need to be cautiously optimistic. Based on what charts are telling us, last week was ideal time to get back in the market. However we might get another opportunity in coming days. Although there is no guarantee that the rally will sustain, we shall see signs in the charts. NYUD and BPNYA will act as our guidance tools. What does it mean for our Investments?
Market recovering but be cautious... Comments are closed.
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