Nifty Prediction worst over Buy high quality stocks in delivery expect today’s lows to hold expect RBI to cut rates shortly
Nifty had a very rough day. I was not expecting a close below 11000 however we were expecting volatility to be there till 9th Match. Anyways as per my prediction Nifty has formed a bottom and positive time cycle will now begin and the cycle will keep getting stronger as we approach May 15th. As we have told our clients that by 15th May we see world Govt’s and Central Banks will cut rates very aggressively and announce some sort of fiscal stimulus packages so we see current prices a great buying opportunity especially in high quality names. Those who want to invest via SIP or Mutual funds should buy now. As predicted we won’t be surprised to see 11900 on the higher side.
From a fundamental perspective Crude oil collapsed overnight and though we don’t see crude oil sustaining lower but we see crude oil wont be moving much higher either in the near term or even in the medium term and that will be super bullish for India as the trade deficit which has been a problem for sometime now is taken care of due to the sharp fall in crude oil prices. Thanks to the sharp fall in crude oil higher side inflation is now capped and hence we expect RBI to cut rates shortly by anywhere around 0.35 bps to 0.50 bps and this will fuel the markets.
Part of what we told our clients yesterday
Many of you have been calling me over past few days and asking me one question and that is when will this fall stop and where will this fall stop? So I am once again giving you a overall view of where we stand.
Astro cycle prediction The fall started with Mercury being retrograde and tomorrow 9th March Mercury will end its retrograde motion and go direct. In addition to Mercury Retrograde there are some other astrological signatures taking place today 8th March which is Sun and Neptune aspects and Venus and Uranus aspects both these astrological signatures individually have over 88% probability to change the trend so we have 3 major astrological signatures which have historically individual correlation to change the trend and hence from an astro cycles perspective we see that worst is in the price. Sure we can see some panic on Monday morning but we don’t see downside sustaining . Keep in mind minor variations can take place but overall buying in panic is the key here. So this is with respect to current bottom formation. So in short as far as downside is concerned we should end downside panic anytime on 9th March and a steady up move to begin. This will also hold true for the coronavirus cases and treatment so I do not see any major problem from coronavius related news post 9th March.
So this is as far as cycle bottoms are concerned but when we look beyond this week in astro cycles we see that by May 15th most world economies will have announced fiscal stimulus packages and rate cuts by respective central banks and some sort of liquidity or helicopter money being thrown into the system. This will fire up the markets in the near term and take all world stock markets higher and a risk on trade will emerge. I know many of you will say that it does not solve the underlying major slow down in the economy and I do agree but when liquidity is thrown into the system I think and have seen by experience that liquidity wins in the near term not headline economic indicators and numbers so keep that in mind that this could be one major reason for the world markets to start euphoric rallies. From India specific stand point we see that RBI will cut rates by 0.35 bps in the next few days and also Govt will announce some good news on the NPA problem side so there could be a resolution of lot of banking sector problems by May 15th it could even be earlier than that but we will see some sort of news flow on that front.
Now while on the subject let us also look at the fundamental picture for India. Crude oil which accounts for 80% of the imports has fallen from sharply now keep in mind that I am not suggesting that crude oil will remain lower (yes we see it could move towards 48 to 52 range and settle there) but the point is India’s trade deficit is now 50-70% lower than what it was few weeks ago and since we dont see crude oil moving much higher this will help the trade deficit to a great extent. This will also reduce inflation pressure so that will give RBI ammunition to cut rates beyond 0.35 bps also in the next meeting so India from a fundamental stand point looks much better now and more importantly there are some good value stocks which are high quality now available cheap so buy the recommended stocks in your portfolio and hold longs there.
Bottom line is that from a technical stand point we are extremely oversold so even if we assume this is a bear market start even then we will see a pullback to 11500-11650 ( not that I am expecting a bear market now but this is just as a scenario analysis stand point). So coming back to the point technically we are extremely oversold, astro cycles indicate that worst will be over around 9th March, Fundamental picture looks superb for India due to fall in trade deficit and inflation topping out so look at any parameter that you want and Indian equities present a great buying opportunity as of now.
Once again we reiterate Buy Divis Labs, Pidilit Ind, Tata motors, Maharastra Scooters, HDFC Bank, Icici Bank, Tata consumer, Siemens, Jub food, Kuantum papers in delivery and hold. I also like irctc for that matter from a longer term perspective. Point is buy high quality stocks and hold.
Silver and gold I don’t see near term upside. Longer term we remain very bullish on both but in near term we don’t see upside sustaining now. So if you are long here at higher levels you must book profit and wait for panic to set in. I know most people won’t be able to understand that there could be a panic in the silver and gold markets in near term I get that but based on all calculations we see one panic there and in that panic we will buy gold and silver as longer term we remain very bullish. On higher side keep booking profits in gold. Silver those who had bought physical at 33 to 38 and around 42 and booked once around 48 now should wait for our buying message because in panic we could see great downside levels to enter silver because longer term we see 1 L in silver.
Enjoy your weekend. Tomorrow will be last day of panic keep limits open to buy but don’t over trade.
With regards to coronavirus we see remedy or vacancie or treatment will get approved soon so the fear and rumour mongering that’s going on because of coronavirus will not sustain based on my calculations.
Good trading to you!