Buckle up! Stay light as Nifty50 could retest 9,800-10,000 levels in medium term

The market is expected to remain weak on a medium-term basis.

 

The momentum-based oscillators are in ‘sell’ on near and on medium-term basis. Given the sharp fall over the past few weeks, the market is expected to remain weak on a medium-term basis.

The Nifty 50 index formed a “Bearish Engulfing” on the monthly time frame (September 2018). In general, this pattern has a negative implication for the Nifty 50 index and the market in general. 

Further, the Nifty 50 index closed below its 200-days simple moving average (SMA) for the second day in a row which is not a bullish sign.

The momentum-based oscillators are in ‘sell’ on near as well as on medium-term basis. Given the sharp fall over the past few weeks, the

market is expected to remain weak from a medium-term basis.

Our proprietary Greed/Fear indicator, which is a good sentiment measure of medium to long-term trend for the market, is well below its

equilibrium signalling that the capitulation is yet to come.

Taking that into consideration, the Nifty50 index may attempt to test the zone of 9,800 to 10,000 levels in the near-term.

A) The key indices and major stocks are displaying weak trend on the charts. The breadth of the market continues to remain in the negative

zone, as there are more number of stocks hitting fresh 52-week lows, while there are hardly a handful of them scaling to 52-weeks highs.

Given the negative readings, any sharp fall on the Nifty50 index towards 10,000 may attract some contra-trend buying. Therefore, one has to

be very nimble footed while attempting any such contra trades.

We are yet to see a proper capitulation in the market as measured by key indicators followed by us, therefore, there may be incremental

legs of weakness before the final bottom is confirmed.

Till then, it is better to stay on the sidelines.

MORE WILL UPDATE SOON!!