Short-Term Trend Looking Up

In any given uptrend, it is only logical to expect minor cycles to play out as steep moves make way for corrections or consolidations. We've all learned that cycles are "fractal" in nature. What does that mean? It means there are cycles of different degrees and scales across different time frames.

Here is Nifty 50 back with a strong bullish candle, bouncing from levels close to 13,700. With the resumption of this trend, the target we're tracking over the next couple of weeks is 14,960. Although the indicator is yet to move into positive territory post the negative divergence we witnessed last week, it looks like the broader trend is back in place as the short-term move complies with the same sentiment.

Click on chart to enlarge view.

Depending on the time-frame that you follow, you will have to select a cycle of a degree/scale that suits you. At All Star Charts, we go through the Daily, Weekly, and Monthly charts which leads to medium and long-term time-frame analysis. We hardly ever check out the hourly charts!

Within these fractal cycles sector rotation plays a very important role. All the sectors don't move upwards or downwards together. There are leaders and laggards that move in different stages of a market cycle. Keeping the short-term weakness in mind we chose to focus on Auto and Consumption sectors while taking a being wary of Private Banks and CPSE.

We continue to remain bullish over the medium- and long-term time frame and see no change in those trends yet. With the short term time frame indicating strength, it might be time to revert to the overall bullish market call that we've had for several months now.

For more updates about the trends we're seeing going forward, sign up for our Monthly Charts Strategy Session.

Thanks for reading and please let us know if you have any questions.

Allstarcharts Team