Nifty trend / Nifty prediction April 9th 19
Nifty trend today was bearish. Based on my Nifty trend analysis / Nifty prediction we don’t see any major upsides in the near term sure there will be pullbacks from time to time and we are not suggesting for one minute that pullbacks won’t come, sure they will, however, we feel that based on trend analysis the current trend is more or less in mature stage and even though there could be still some more minor upsides we don’t see Nifty sustaining on the higher side. It is possible for a new high also we are not disputing that but the point that we are making is all positives are in the price and we don’t see any major upsides or price sustaining higher for the longer duration of time. The price and money flow activity indicate that this current move could be a classic case of buy on rumor sell on news assuming the event pans out as the markets are expecting and if markets see a nasty surprise then we could be in for some sharp downside surprises.
Many of you are asking me one question repeatedly and that is do you see the entire market falling or the entire basket of equities doing badly. The answer to that lies in understanding this very important statement. Broadly and generally equities will not do well or give much returns from current levels of around 11600, however selectively we do see deep value stocks where there are some awesome opportunities that must be grabbed and hence the entire world of equities cannot be painted with the same brush. You will have to be stock specific if you want portfolio returns, you will also have to trade in and out at specific times in your own portfolio. Take for e.g. some of the trades that we did we bought Kesoram at 58 and got out at 78 all in a matter of days, same goes for Nalco bought at avg of around 50 took a dividend of 4.5 Rs (that’s 10% and got out at 55) or for that matter PTC we got in around 73 and got out around 102 or for that matter Icici Bank got in at around 295 and got out at 363 so unless you do such trades which are tactical in nature we don’t think any portfolio will make any money especially the buy and hold portfolios or the SIP portfolios again broadly speaking. To make money there will have to be a tactical trade or you will have to buy deep value stocks (yes here buy and hold is possible and will make money) but we don’t see that same picture across the board.
Further to elaborate on the buy and hold category stocks which will make good money is , for e.g. we identified an awesome multibagger where deep value is present and we see the stock moving towards 100-250 regardless of who comes to power in Delhi or for that matter where the Nifty moves. Since the time we have initiated buy rating on the counter is already up 20% just in a matter of 5 days and even now we see a min of 200% upside in the next few months in the counter. We will not be surprised to see even 400% plus returns in the counter so there are some selective opportunities where stocks are at deep value and the only way that those specific stocks are going to move are up but having said that does that mean that the broader market is at deep value and the answer to that is no. More or less the broader markets have factored in all positives in the near term. Be it elections results or assumption that earnings growth will come back strongly in the broader market (and we don’t see earnings growth in the near term looking at the deep contractions in the market). So at a time when growth is slowing very rapidly globally and locally, we don’t see the earnings picking up anytime soon.
Good trading to you!