As expected, we got our bounce but how long will it last? Is this a real market turn or simply bear market rally? How do we know when the bottom is in and the next BULL run has started!!! BPNYA continues to rise above EMA(30) suggesting more stocks are inching higher as Volatility ($VIX) continues to remain near 20 level. NYSE daily chart is showing that market is near resistance level at present and volume is not as strong during this rally as one would think. Market may make marginal high before overcomed by sellers. Even if it manages to stay afloat the next resistance is near 9,999 area followed by 10,200 area. This market will need lot of fuel to break through those resistance levels and unless a major catalyst is present, it is highly unlikely that market can make it above those levels. Weekly chart suggest that market is near resistance level and RSI has not yet managed to break through the down trend line (shown by dotted red line). In other words, this market may have some more room to run before turning over or going into range bound action. NYUD is below EMA(21), however it appears to be improving as RSI also appears to be breaking out of down trend line. Charts are telling us to be very cautious as this market needs lot of work to turn around. We believe that market will try to inch higher in two steps forward and one step backwards, however this may only continue for a while in absence of any major catalyst and eventually after few weeks the next leg down might be in the cards.
What does it mean for our Investments?
Bounce holding so far but remain alert... Comments are closed.
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