Nifty trend / Nifty prediction 25th Feb 19
Nifty trend today was that of consolidation and range bound trading after the up move seen in the past two trading days perfectly along expected lines. As per my Nifty trend analysis near term there is a uptrend on the hourly charts however when we look at bigger picture that we once again realize that Nifty monthly trend is sideways, Nifty weekly trend is also sideways and Nifty daily trend is also sideways between 10600-11000 broadly speaking and till the time we do not see Nifty moving above or below 10600 or 11000 with high volumes and thrust till that point in time there will be no point taking any major directional trades in the Nifty surely there are tactical trades to take but they are just purely tactical in nature and are trade in and out trade . The manner in which Nifty is moving could lead to a longer time frame consolidation zone so on the higher side beyond 11000 Nifty could just expand the trading range and move towards 11300 or 11400 and on the lower side Nifty could see break 10600 and expand the trading range to 10000 or 9800 but eventually the manner in which things are panning out there could be a extended time of consolidation taking place so even if the trading range of 10600-11000 breaks based on my Nifty prediction we see that range will just be expanded into a fresh range of 9800 on the downside to 11400 on the higher side. We say that because when we look at the earnings picture we see that Nifty for next year will be richly valued around the level of 11400 or thereabouts while on the downside around the level of 9800 a lot of the PMS money or long term money that wants to get into the market will come in because that is around decent valuation for entering the market in addition to that the broad stock market is already trading around 7000 levels so there is not much more downside from a broad stocks market perspective and hence there is an increased possibility of an expanded trading range playing out for the rest of the trading year at least till the election results are out so if Nifty moves lower SIP money and PMS money supports the market while on the higher side around 11400 smart money moves out to other asset classes as risk reward does not favor holding stocks or equities as an asset class and hence it will be paramount to move to counters and instruments that trending either in uptrend or in a downtrend but surely it will not pay just to buy and hold at current prices as most of the market is in sideways mode.
So the next important question is from where we will see returns from a portfolio standpoint and the answer to that lies in deep value stocks and churning of portfolio and buying into some other instruments it may be gold, silver, crude or even some agricommodities the point that we are trying to communicate is that where there is value buy that if you want returns because a buy and hold will not work so churning between asset classes and instruments will be the key to make money in 2019 . Stocks where there is deep value earnings have bottomed will provide decent returns regardless of where the Nifty and the broader stock market goes. We say this because the manner in which some of the quality names have been hammered provides some amazing opportunities so look for those set of stocks and buy them on dips in a staggered manner and in some high quality names buy into panic and sell into the euphoria so consistent portfolio churning will have to be done in order to get decent returns in addition to these strategies it will also be important to use fixed income as a proper tool during the year.
If you are only trading on the basis of this post please use your own risk management and trade, please do not over trade and always keep your risk in check. The coming time is not going to be east for most Indian stock market participants and hence be very nimble footed while investing and trading.
Good trading to you!