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What is the next price direction on the FTSE 250 (FTSE:MCX)? Would the price continue going upwards, as it has been doing recently? Is it now the time to start shorting the market? The forecast below would answer the questions above. FTSE 250 is a market that should be handled by skilled traders only. The elephant’s head is more than what a child can carry.
Technical Forecast
The chart below points to an uptrend – a bullish signal – that started several days ago. Whatever the reasons given for this, ultimately, it would merely be accumulation and distribution with limited accumulation expanding as a result of more buying pressures. For this analysis, the Exponential Moving Average period 21 and the Williams’ Percentage Range period 20 are used. Since the beginning of December 2012, the market has been in a bullish mode: the price is above the EMA 21, and the Williams’ % Range is in the overbought region. This means that the northward determination is very strong. Besides, it should continue as such. Therefore one would do well to consider long opportunities only (and this is no harum-scarum), especially when the market retraces back to certain support levels, say 1.2100 or 1.2050.
When would one short this market? This uptrend would definitely not go on forever. Therefore, one would short only when there is a clear indication that the extant bullish phase is over. That would be when the price goes below the EMA 21, and the Williams’ % Range goes into the oversold region or going very close to that region. The 2 conditions above must be met; otherwise one would not consider it a bearish signal. Sharpening your trading skills as far as possible is something you do without ceasing. You would simply observe whether there is a selling pressure in the market; or a buying pressure, and this is the junction where technical analysis is relevant in affirming the market bias.
Conclusion: The market in question here, FTSE 250, would continue going up. No market should be shorted merely because it is very dear. Any attempt to do that could prove to be Mephistophelian in nature. Even a pullback in a context of an uptrend should be seen as an opportunity to buy cheaper. For you to sell there must be a bearish confirmation signal. Until then, what we have here is a northward outlook.
This article is ended with the quote below:
“The reality is that trading and investing success comes through hard diligent work. I’ve written about how you can’t realistically expect better money than other professionals without working hard… Learning to take consistently small losses is the only way to market generated riches” – Richard Chignell (Embracethetrend.com)
