With Markets going up after budget, has NIFTY turned bullish? Though there is bearish divergence on all the indicators in Weekly charts, what is pulling NIFTY up?
While NIFTY chart is weak, there are some sectors which are yet to retrace weakness. Basic Materials and Financials sector need another retest of highs to gain weakness. Consumer Durables is one sector which is very strong against the other sectors. Apart from these, all other sectors have retraced bearishness. The prominence of chart patterns on the bearish weakness pattern formation is shallow. This indicates, that the market will hold to range moves, with higher highs and would need a range break towards the bearish direction to get into a new trend.
Bullish range moves though would seem to have good trades, there are very much likeliness of getting many whipsaw trades in the present market. Those small gains made in the winning trades would be taken off by the large number of whipsaw trades. So better stay on the sidelines, till a strong trend emerges.
The ensuing bullish move further strengthens the bearish sentiment; so, wait for weakness to short again. As charts do not have strong patterns, it is advisable to cover shorts on target. Re-enter again if bearishness gains strength.
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