A quick look at the Global Indices.
S&P 500
- Oversold and back to sub 30 RSI
- In the previous instance of oversold it has either made a new low and Positive divergence or goes sideways before a clear recovery.
- Will it be a quick recovery or a formation of positive divergences over next few days but eventually a good recovery over next few weeks.
Dow Jones
- Back to june lows as well as pre covid prices.
- Most oversold since covid lows.
- Will it be a quick recovery or positive divergence over next few days but eventually a good recovery over next few weeks is the view.
Nasdaq 100
- Oversold but no positive divergences yet.
- Also the index seems a major top is done like 2000.
- May not gain leadership for long time. A short term bounce here but better to focus on Dow and S&P
VIX – No major panic but no event as well.
Vix - Still a little away from the
35 mark which has been a bottoming out zone for S&P 500.
Panic not as high but no major event as well.
Not the time to be bearish but be ready to watch for reversals.
Nikkei
- Not oversold.
- Holding on above the trendline
DAX
- Breaks March June lows.
- Showing positive divergences
- If no follow up selling in next few sessions or a quick move above last 3 days highs would indicate a reversal.
For the Nifty we are still away from being oversold. 16800 was the last breakout and another gap at 16950. So that should act as a support.
Bank Nifty 38000-38500 a support. ( still a leader.)
Nifty IT maintain the view to be not bearish and accumulate on dips.
Time to look out for stocks reversing after retesting and holding on to the recent breakouts.
Conclusion
- Maintain the stance of India to outperform global markets.
- Continue to look for stock specific opportunities.
- The outlook remains bullish for the short to medium to long term.
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