Market has recovered from February bottom very rapidly but Is it too fast, too quick!!! Can this rally continue with the same pace going forward OR are we going to experience speed bumps!!! What are charts telling us? BPNYA is well above EMA(30) and Volatility ($VIX) has been dropping consistently for past month. However, it has reached levels which appears to be a turnaround zone which in turn means volatility might rise in coming weeks causing market zig-zag, better to be cautious than getting surprised! Daily NYSE chart does suggest that market bounce has reached resistance zone which should slow down the pace of this bounce or even cause a pullback/sideways movement. RSI is very close to being overbought. Weekly NYSE chart does not provide any more clues than daily chart as RSI is above 50 mark and has broken the down trend line. Significant overhead resistance is very visible in below chart. NYUD does suggest that volume is supporting current market move as RSI continues to rise above 50 mark and has also broken the down trend line. McClellan summation index appears to be crossing over EMA(59) suggesting possible trend reversal as more stocks are advancing compared to declining in cumulative manner. Overall, charts are suggesting that this market bounce might be showing strength, it is better to remain cautious as market has to overcome overhead resistance. In near term, we might experience a pullback or sideways action which will also be healthy for the next BULL run, however the magnitude of the pullback will decide market direction.
What does it mean for our Investments?
Market bounce going strong but be cautious... Comments are closed.
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