The index lost a little bit of steam on the upward movement, with the index moving sideways last week. This can be attributed probably to the overbought situation of the index.
For the coming week, expect further sideways to downward movement for the index. Any downward movement is considered healthy for the index as long as it does not move below the 130 day moving average at 4053.
A lot of stocks that have been moving up the previous 2 weeks are now overbought. It would probably be better to lessen your position for now and sell a portion while the stock is still trading high. As long as the upward trend in a stock is intact, you can still hold on to your remaining portion, otherwise sell when the upward trend is broken.
This might probably be the reversal that we are waiting for NI. On the first trading day last week NI formed a white candle with 6M trades which is nearly a complete turnaround from the trading on Friday the previous week (April 1) where a black candle was created with 7M trades.
Trading volume on days when sell down happened is low and trading last week was peppered with instances where opening is near closing value of the stock. So what we have here is definitely a reversal from the downward trend, but there seems to be a lot of indecision on the upward movement.
Looking at the weekly chart, we can see that the white candle formed for last week had a very significant amount of volume 15M trades compared to the previous week’s 18M trade.
The daily and weekly chart are both displaying a reversal action. However, we want to see a follow through on this reversal. I am hoping that the follow through action would happen this week, otherwise, it would be a sideways movement for this stock and definitely momentum would fizzle out.
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