Nifty trend prediction today Feb 19

Nifty trend prediction today Feb 19

Nifty trend today was bullish since morning. Based on my Nifty Prediction near term trend remains sideways between broad trading range. Regular readers of this website are well aware that we have been saying based on my Nifty trend analysis / Nifty prediction we see the longer term trend for Nifty is down however from a near term perspective we still remain well within the trading range and near term trend is sideways and nothing has changed from a larger perspective so we have had days in the past where Nifty has fallen by few hundred points and few days like today where Nifty rallied from the low point but eventually we still have been trading well within the trading range and till the time the trading range does not break there is no point in taking any directional trades. Once again keep in mind that Nifty longer term trend is down and eventually we will end up making a lower top the question is at what level the levels could be 11000 or 11200 or 11300 or some other level that is a matter of where the lower top formation takes place but that does not change the fact that this is still just a pullback in a longer term down move and based on my Nifty prediction we see eventually levels of 10000 been broken (currently pullback on from 10000 levels which will end somewhere below 11760 where is the question). Please keep in mind that we are not suggesting that pullback till 11300 or bit more higher can’t come sure it can but on the higher side we don’t see macro and fundamentals supporting the market and hence we do not see Nifty sustaining on the higher side.

There are many of you who have been calling me and asking me why I do not see Nifty sustaining on the higher side and then answer to that is just to explain this in simple words there is no valuation support for the Nifty. Earnings trend has been lower and hence if Nifty does move higher it keeps making Nifty valuations look extremely expensive for e.g. if we take next years estimated earnings then in that case at 11350 (assuming Nifty will have 15% eps growth) 18 times forward. Nifty is fully valued at 11350 so from a Nifty basket perspective 11350 is the cap assuming 15% earnings growth so till the time we do not see earnings growth broadly speaking we do not see Nifty sustaining higher. Please keep in mind that for a few days Nifty coming higher is one part but sustaining higher is really the question and the on ground economy is slowing much more rapidly than what even we have been estimating so we will not be surprised to see Nifty earnings downgrades coming and even in that circumstances Nifty will still look very rich, in addition to this when we compare emerging market valuations to Indian stock market valuations India is trading at significant premium so even the case for FII’s to drive the market is nonexistent. 

Good Trading To You!