RSI Scare

First of all, my most sincere apologies to all of you. Though I wish to... but there is no gain if I spend more time in explaining my absence. I know you are not interested in knowing those reasons behind my absence and would simply want me to get back to writing trading and tutorial posts. So will not bother you more and  get to that straight away.

I had explained some of the scenarios and their meaning in my last post which was two weeks back. Since then we have had two positive weeks and things are extremely interesting now.

We have created a new peak in last two weeks. Also we have managed three higher lows now on weekly basis. To be honest, I was not expecting the rise in last two weeks. I would have settled for rise of the first week and would have bet against the second week but then such are the markets. This week, I am definitely betting against the similar rise though we may not fall much.

MACD is flat but RSI is nearing the overbought zone as seen above. RSI is much more overbought in daily chart. Have a look below on daily chart. Also worth noting is that RSI in overbought or oversold zone has been very reliable in last two years or so and I have marked instances of RSI overshooting the upper band and subsequent market reaction.

Presently also, as seen above, RSI is in stratosphere and that certainly is not a good sign in short term. Expect some weakness in the NIFTY this week but do not short heavily. Things often get irrational in a strongly trending market in either direction. Otherwise how would you explain last two weeks with virtually no change in fundamentals of companies, Country or World.

Then I cannot help but share good news that I have been promoted after successful completion of my last project. This development in partially responsible for my absence. However after thinking a lot about best way to apologize and make amends with all my readers, I have decided to write three posts on the trot in three days. That was the only thing which came to my mind and hope you would like it too. So I am going to go all out of my way to make sure that you have two more posts in next two days. Will also be back on Twitter in case you want those supports and resistance levels.

Needless to say, will love to hear your comments. Happy Trading.