In this post let me just try to jot down few points regarding the direction for stocks in India and as a correlated class, stocks across the world for the next few months. This mind you is not a prediction but a general sense one gets while trying to understand and read technicals of the markets.
Nifty - Made a bottom at 4531 and has been preceeded by piercing candlestick which is being confirmed this month by another strong showing. Stocs have turned up from oversold position and given a buy. The prices are above the 8 and 13month EMAs which stand at 5179 and 5233 respectively.
In the medium term - nifty has made a doji on weekly charts which shows the index may consolidate for few days now moving sideways to down. Stocs are in overbought territory but thats not the signal to sell, though profits may be booked. 5180 is a very strong support zone now and is buy of dips strategy now.
In immediate short term, the market has been overbought now and lets wait before going long, since this is not the opportunity to take fresh new long positions. 5323 has been a strong buying zone for the moment and need two closes below it to ensure that buying opportunity comes in.
Seasonality says we may have a dip only in 3rd week of Feb and then we would move higher.
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