As expected, market bounced from the support level near 10600 area BUT will this bounce hold! Is this end of correction or just a bounce from oversold levels!!! What can we expect in near term? BPNYA well below 70 mark and could take a while before it can cross EMA(30) to trigger BUY signal. Take a look at volatility ($VIX) which appears to subside however overall trend is moving higher which has caused the drag on the market. The bounce from support level is very apparent from below NYSE daily chart BUT can this bounce sustain! If market is able to get back above MA(50) then the probability of correction being over is lot higher. However the volume during this bounce appears to be low and we are NOT out of the woods yet. Weekly NYSE chart shows that market is trying to bounce from current level which appears to be supported by the trend line. RSI has managed to stay above 50 which is very critical for market to get out of this correction. NYUD had pulled back to EMA(21) suggesting a low risk entry, also RSI has managed to stay above 50, which is needed for this correction to be over. Based on the information we have so far, it appears that we are NOT out of the woods yet. Correction might be coming to an end but we do NOT have confirmation yet! At this juncture, probability favors correction continuation and we need to be patient. Market may fall back towards MA(200) or continue to zig-zag between MA(50) and MA(200), however if it breaks out above MA(50) then that can be considered as end of correction. Time will reveal what we have in store in coming days/weeks ahead...
What does it mean for our Investments?
Market still appears to be in correction, be cautious... Comments are closed.
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