Dear Investor,
This is a question in every investors mind who has booked profits or losses and those who have decided to hold on to their holding even at losses. Following is weekly chart of NIFTY index. It is clear that long term trend is still intact and in fact this is a place to load up on your favorite stocks. Rather than favorite stock we should plan on adding stocks that are holding well in this correction.
Corrections are important because they show us the stocks which are truly respected by the investors and those which are only up because of hype.
In order to make a final call to buy or not, lets look at that daily chart of NIFTY below. The market has certainly stopped correcting. It has started consolidating in a narrow range, that is a good sign. It confirms our belief that correction is over. Upon closer look at the volume pattern, there is no convincing upside volume. If you carefully observe the green volume lines at the bottom of chart are shorter than the green volume lines. That means the confirmation is not there yet.
I will personally wait for volume confirmation to come in order to go long. Most of the NIFTY charts are trading below 150 day moving average line that is really not a good sign but it could be a place to start placing you bets. Being a conservative investor, I would rather wait and loose some gains than being early.
Thanks
Anil
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