Still a nice overbought condition by the volume is driving it and the market seems determined to get to the high. I’ve marked this on the second chart to remind ourselves just how far the Nifty has come.
During 2007 as i remember the market was getting into a similar bullish run as now and you can see on that second chart the similar very steep nature of the run up. Sharp pullbacks have happened before in this market after such run ups and the market is very overstretched to the upside technically. Caution is the watchword.
The Nifty index is still at a level of overbought it has not seen since 2007. Watch this market. It is still very stretched to the upside from a technical point of view.
The Nifty has been pushing above the upper Bollinger line, 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, particularly for longer term players.
That said, the Parabolic-SAR, the dots below the chart action, are nicely bullish so the market is soundly underpinned from a technical perspective. The MACD lines as you can see opening and moving to the upside.
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.
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