NIFTY: Has market turned around?

                                                                               Nifty made a stunning move on Friday and  made some more pullback yesterday. Lucky traders would have made impressive gains. But the key question remains: Is this turnaround for real?. And yes, the move does warrant re look at market positioning.
Can one invest with confidence in the market?
I am afraid not. S&P500 continues to have bearish setup below 50 dma. Overnight S&P500 sold off from highs clearly indicating bearish pressure in the market. Nifty also has made a good pullback. BUT when you look at the charts of various stocks – they continue to be all over the place. They inspire no confidence.

At any point of time – these 3 questions are relevant:

1. What is the trend of the market. It means eventually where is market headed?
2. In ST – Is market going up and how much is the upside?
3. What is the probability of trading success?

 Let us look at Nifty Chart to answer the above question
As you can see in the chart above – It’s as chaotic as one can get. The Chart is all over the place. Nifty sold off from highs of 6200 it touched in May. AT Current price of 5842 – it is down 5.7% from highs. It is completely in line with what’s happening with Emerging markets. The Global trend for Emerging markets continue to be down and hence will play a big role in what Nifty does. That’s not all – even S&P500 is not looking great and can correct to 200 dma in next few days. Looking at the Global setup it’s very difficult to be BULLISH.
Emerging Markets ChartLast week, even Emerging markets staged a substantial comeback from lows but look at the overall picture and trend which unfortunately is very negative and bearish. What happened last week was just a PULLBACK.
That’s not all – the trend of Nifty is CHAOTIC right now. Though it has made a big pullback in last couple of days but technically that does not change the trend of the market. Nifty has made so many of these up and down moves that it is very difficult to make any sense out of it. We are in a difficult Global environment and India’s situation has not changed a bit both fundamentally and technically. The Gas price hike means nothing right now. How can a current Govt take a decision for next Govt?
IN Short term, Nifty can rally to 50 dma which stands at 5924 (5950: Horizontal resistance line). But looking at total Global picture and trend of the market: the picture is very confusing.
At this point of time – it’s safe to be neutral than BULLISH. There are too many ifs and buts and both bullish and bearish positions can get destroyed in no time.