Market Status Shifted to a Downtrend

Posted Date: April 19 2021
We moved the market to a Downtrend as the Nifty breached its correction low (14,248) and made a new low of 14,192.

- The market status was changed to a Rally Attempt from a Downtrend on Friday after Nifty managed to hold above the previous correction low (14,248) for three consecutive days. But today, as that low was breached, we are back in a Downtrend.

- Many stocks continued to take on the technical damage with many moving deeper into their respective bases and breaking below logical support levels. Markets are currently not conducive for holding stocks below their 50- and 200-DMA. It is better to protect capital by staying on the sidelines than to take risks. Although it is tempting to buy stocks on pullbacks during a market correction, one should wait for market conditions to improve and avoid catching a falling knife.

- Looking forward, we will shift the market to a Rally Attemptif Nifty establishes a bottom and stays above today’s low (14,192) for three straight sessions. From there, we would prefer to see a [follow-through day]before shifting the market back to a Confirmed Uptrend. Should this occur, the focus will be on ideas breaking out of the early-stage base pattern and showing the best relative strength with good accumulation.

What do you think? Please email us any questions or comments.

Disclaimer: Information contained herein is not and should not be construed as an offer, solicitation, or recommendation to buy or sell securities. It is for educational purposes only.For more information, see our Legal disclosures here.

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