Hello,
Yesterday's move in the markets proved to be a anti-climax as the much awaited breakout did not come. While Nifty did move over our level of 5475, it could not sustain and selling in the last hour meant that we closed negative after trading around in a small range for most parts of the day. Its important that the last hour of selling is analyzed thoroughly since it can be read in two ways. One, its a case of Breakout failure. If this is a breakout failure, market can turn around and go down pretty fast to its strong support zone of 5335 or Two, it is just a shakeout. A shakeout is one where a sharp downward move occurs in an upward trend market with no prior indication or extensive previous preparation. This catches weak bulls offguard but the trend itself does not get over and it continues as before.
Its still early to judge as to whether our markets are preparing for a strong breakout from this zone or is this the end point. One of the problem we seem to be facing is Reliance. A market heavy weight and one of the leading performer in most rallies, this time around, its underperforming the market and sits on the verge of a breakdown. While one can remain Bullish for now, its better to know a level to exit if the supposed breakout does not happen so that one is not stuck in a long position in a falling market.
Regards
Prashanth
Mythri Stocks & Shares Pvt Ltd.,
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