Watch this market. It is very stretched to the upside and I’m surprised we have not seen a correction yet.
The Nifty is pushing hard up against the upper Bollinger line now, the Slow Stochastic is crossing well above overbought and the RMI and the RSI are above overbought. All good reasons to expect a correction or consolidation.
As it stand this market looks ripe for a correction and better levels to buy.
That said the Parabolic-SAR, the dots below the chart action, are nicely bullish so the market is soundly underpinned from a technical perspective. But it does need to correct.
Only seldom do markets move much above or below the Bollinger lines. It is generally wise to expect the market to be restrained to the downside or upside in this case. Have a look back on this chart and you will see how rare moves outside the Bollinger bands are.
Check out the speed resistance lines on the second chart which have been acting as overhead resistance. This line has now broken.
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