Markets are really in extremely overbought territory and also have been relatively stagnant, this last week. Still, with lot of bullishness in the air, though.
Positives
- All indicators maintaining their uptrend.
Negatives
- None in particular. Still extremely Overbought.
- MACD threatening to move down.
Last week was an indecisive week. With a few down and few up days. But we did close the week near the high of the week, which is very encouraging. Markets have had Only upside for nearly 3-4 weeks now. And for any healthy upside, a good Correction to the downside Must exist. Always remember, the demand and supply curve has to go up and then come down. It cannot go up all the time.
Theory is, where would you get the buyers from. After a point, the buyers are exhausted and sellers take control. If not for long, at least for sometime. And hence, we would not get too excited about going long at this point. Better to wait for a day or two to see what the market thinks should be the direction for the rest of the week. Before jumping into any of the stocks. Also if you notice, a flat Week means, losing steam. Hence, it adds to the cautious attitude one must possess in the following week.
Outlook
We would still hold our stance from last week. We are bullish and it is Only advisable to trade from the Long side. Definitely Short, if we break couple of major supports. One being the Trend-line(Lower), which is where we are hanging right now. And the other being a major support around 6630. As long as these critical levels are intact, go LONG.