RSI is an indicator that tells us when an index is overbought and above 80 is a situation where one can exercise caution.
We do not want to sound the bearish bugle but this is one of the indicators and it needs to be corroborated with the other indicator.
To be on the safer side as of now we can say that Nifty support and resistance have shifted to the 18000-18500 level. Thus any break of the 18000 level in Nifty can be a first warning sign and to be a doubly sure break of 17250 is a firm indicator that Nifty may be heading for a 10% correction.
Remember that as of now this rally for the past 18 months post corona lockdown in Mar 20 is a single directional rally and it will be healthy for the market to provide a dip of 10% and then it will be a good opportunity to enter in the market.
All those waiting for Nifty to fall to 10000 level or 12500 may not see the light of the day as we are in a long term bullish trend. So, if you have you not entered the market, then now is the time to get started.
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