Nifty trend prediction today 25-1-19
Nifty trend today was absolutely flat in line with my Nifty prediction / Nifty trend analysis through the day but towards late trade Nifty picked up and managed to close mildly in the green by about 30 points. Yesterday there were many traders and analyst who were saying that the down trend has resumed just because Nifty has sharp 91 points fall yesterday in the second half and we had cautioned our clients and even on the website that as per my analysis Nifty trend remains sideways till the time Nifty does not breach 10690 on the down side or around 11000 on the upside (Nifty spot levels mentioned). There is a possibility that Nifty does give a minor breakout and moves towards 11300 not necessarily but eventually we do not see Nifty sustaining on the higher side because from a technical analysis stand point Nifty has a lot of resistance around 11300 area in addition to the resistance from a fundamental perspective Nifty looks richly priced around 11300 so till the time earnings do not pick up which we feel is still few quarters away for the broader Indian stock market we do not see how Nifty will sustain on the higher side. Please keep in mind that based on my Nifty trend analysis and Nifty prediction we see Nifty eventually making a lower top and moving lower. The question is till what level will Nifty move higher in order to make a lower top before resuming the main trend which is down but at the same time keep in mind that Nifty can even move towards the levels of 11300 in order to make the lower top so where at what level the lower top is made that remains to be seen but that’s not the point whatever Nifty does will eventually lead to a lower top the question is the lower top is made at 11300 or at 11000 or 11000 that remains to be seen. There are many who are asking me why we see lower top being formed and why we do not see Nifty heading towards 12100 for now. There are many reasons for that as we have said Nifty moved higher from 10000 till 11000 based on three fundamental factors and that were Brent crude oil falling, bond yields falling and rupee being stable and coming from 74 to 70 so in a nut shell these were the three factors that supported the rally now these three factors will act as a headwind for the Indian share market. The best of lower crude oil prices have been factored in the price, bond yields have started to bounce back and rupee has made a bottom and eventually will move higher so these factors now will act as a headwind. Even if the markets don’t take these as near term headwinds even in that scenario the tail winds which were present are now missing to add to the lack of tail winds earnings are broadly missing estimates and that makes stocks look more and more expensive. Besides these factors yesterday Priyanka Gandhi joining politics could also dent the probabilities of NDA returning to power so with all these fundamental factors markets are now staring at even bigger possibility of coalition Govt in the center in 2019. I am not suggesting that a coalition Govt will be formed or not but the probabilities of the possibility of a coalition Govt just increased and as we all know markets do not like uncertainties so in such a back ground which is even more compounded with lower liquidity in the overall market the case for equities giving significant returns in a long only trade looks very challenging until and unless you don’t pick the exact right set of stocks. We have been waiting on the sidelines for the past few days since we booked profits in our short positions and till the time we don’t have a range breakout we will have to wait but having said that even in the case of a bullish positive breakout from the trading range there are too many variables which the markets have to deal with at the moment and that will surely provide opportunities on the short selling side or to put it in other terms investors will surely get better bargains from a broad stock market perspective in the months to come.
Good Trading To You!