As has been said before the point of the Nifty-50 Stock List is to be able to see extremes, especially at the end of a down swing.
To reiterate the strategy is whenever 40 or more stocks on the list are on sells that is most often the bottom or the beginning of the bottom of a down swing. The buy signal is triggered with there are no longer 40 or more on sells.
Yesterday, 5/11, there were 40 stocks on sells. Today there are 38, giving the buy signal for the tomorrow’s open.
So what’s next?
We are walking around in falling-knife territory (see the chart below) but a signal is a signal.
If I have to bet (and of course I have to), I am betting the market is going to bounce tomorrow. Not sure it will be all that vibrant, and even then it may be a one-day dead cat but a bounce is a bounce.
So looking to be long with tight stops to dodge the knives.
(Click on the charts for a larger view)