Market Showing Exhaustion : Confirmation by Volume

Market Future Prediction

We will analyze the market to provide you likely course of the market in the forthcoming weeks ahead so that you are not surprised with the movement.

We think we are moving close to a position/situation where the market, for the first time, is throwing some mixed signals. This is reflected both in the broader market and individual stocks where a clear divergence is seen b/w price and volume. While the price can be manipulated, the volume does not lie. 

There is a clear sign of exhaustion at the top-end of the market where the Seller is trying to extract a higher price from the Buyer who is reluctant to do so. It's the reverse of FOMO where the buyer is afraid that he may be trapped into buying stocks at higher levels. 

When we look at Nifty Bank, we see it losing its leadership position with a topping out formation on lower volumes and has been displaced by the Nifty-IT (@ all-time high) and metals. The change and momentum indicators in the Nifty are trending down and we suspect that the market is anxiously waiting for external stimulus to stay put its upward course. 

The US indices closed lower this weekend as the fresh stimulus package was not forthcoming. So, the prop-up of the market from FII money appears to be dwindling and a sideways move or a correction cannot be ruled out as we near the New Year. 

However, select momentum stocks may rally a bit against the market but will unwind and later on fall in line with the market. At this moment, we would like to err on the side of caution and use rallies to book profits in high priced shares. In case the market shows signs of weakness based on the technical set-up, the first support level to look out for is at 13,415 followed by 13,000 in the Nifty.

Do not get trapped by trading as per your whims and fancies and make use of the accurate daily intraday Bank Nifty option tip for the day as the aim is to trade less but trade accurately and capture the profit and move out of the market in less than 2 hours.