Nifty 28th Feb 2018
Nifty started yet another pullback on 19th Feb 2018 after making a low of 10302 on spot Nifty level and today made a high of 10631 in the morning and started falling. The initial part of the fall was fast and that was exactly in line with our estimates. We had told our clients to sell for STBT around 10630 spot levels in the opening sessions itself and Nifty just touched 10631 and started falling. So whatever is going on is exactly as per our wave counts and overall picture that we see for Nifty. We know that many traders and investors feel that Nifty is heading back up to 10900+ but for the time being we do not see that in the near term from a macro level perspective and from a technical stand point we do not see much upside sustaining and we do expect the main trend to resume however there could be some minor volatility along the way and hence it will be extremely prudent to follow messages and trade. Do not over trade and strictly follow the messages is what we would tell our clients to follow. As things stand as of now we do not expect any upside to sustain and at the same time please keep in mind that we are not suggesting for one minute that pullbacks or rather sharp pullbacks cannot come sure they can but we do not expect them to sustain.
The oncoming time band of astro signatures also indicate a possibility of Crude Oil trending move ahead so there could be a possibility of crude oil heading in one side direction up or down that we will communicate to our clients but the important point is a sudden sharp trend could be seen in crude oil and that could also be another head wind for the Indian stock markets so please keep that in mind. This in fact could be extremely sharp because of both Jupiter and Neptune signatures being in place.
The macro picture for India does not look good at all. The way Indian Bond Yields are moving clearly shows that the bond markets are expecting inflation to pick up very quickly and as a net result we do not expect interest rates to remain lower. We expect Reserve Bank of India to hike rates much faster than what the street is expecting it to. In fact we could see a policy rate hike of 0.25 Bps during the next Reserve Bank of India meeting and that will surely put massive pressure on the cost of capital for Indian companies and most banks have already started increasing base rates so effectively we do not see any major earnings recovery that the street is expecting though we will have to look for the next quarter results very closely.
Good Trading To You!
Part of what we recommended to our clients
2/26/18, 9:05 AM – Glen Drago: Good morning
2/26/18, 9:05 AM – Glen Drago: Hold positions as told
2/26/18, 9:05 AM – Glen Drago: Will update in sometime
2/26/18, 10:18 AM – Glen Drago: Nifty currently is in an pullback along expected lines. Most of you are thinking that once again Nifty is heading higher towards new high and some are calling me and telling me a target of around 10800 but I frankly do not see anything of that sort. From our analysis stand point we are very clear that we do not see any upside sustaining and that overall currently Nifty is just within a range of 10638-10276 and we might just see a temporary or momentary breach of 10638 which is possible and I donâ€™t deny that however I do not feel after carefully once again looking at the internal wave counts that Nifty will even sustain on the higher side. In fact as we had mentioned that the longer the consolidation the better it is for us and that holds true even now. Most of the retail people or the traders have been constantly averaging their long positions that they have bought at higher levels and now they feel that a new bullish cycle will be starting or has started but in fact this is their best chance to get out of the long positions they have built.
Bottom line is that we do not expect Nifty to sustain on the higher side and we expect sharp reversal that will lead to the main trend resuming. Some of you have been asking me when is this expected the point is that it really does not matter as we keep getting premium for the shorts and time value is on our side so frankly do not bother when. Time factor was important only if we were in an option trade in futures shorts we do not have to bother about the time component.
Will keep updating if anything has to be done.
2/26/18, 10:25 AM – Glen Drago: Many are correlating the pullback with the global markets but please keep in mind that we do not expect India to outperform or even move in line with the Global markets if we take a closer look at the Indian markets along with the Global markets we have some very clear signs of massive under performance by the Indian stock market so please do not use the correlation factors of S&P500 with Nifty for now as there has been significant deviations from the mean and we do not see that playing catch up with the global stock markets for now. Please keep in mind that macro factors like crude oil and bond yields are major negative for the Indian stock markets and due to these and many other factors we do expect massive under performance from the Indian markets.
2/27/18, 9:11 AM – Glen Drago: Gm
2/27/18, 9:11 AM – Glen Drago: Hold positions as told
2/27/18, 9:16 AM – Glen Drago: Stbt trade sell part 2 between 10630-10660 spot levels
2/27/18, 9:16 AM – Glen Drago: Nifty hold 4 parts positional shorts as told
2/27/18, 9:16 AM – Glen Drago: Nifty hold 1 part stbt shorts as told
2/27/18, 9:16 AM – Glen Drago: If comes to 10630-10660 spot area then only initiate 2Nd part shorts
2/27/18, 9:17 AM – Glen Drago: Don’t see any upside sustainable
2/27/18, 9:17 AM – Glen Drago: Will keep updating if anything has to be done
2/27/18, 9:31 AM – Glen Drago: Please note stbt part 2 is active
2/27/18, 9:39 AM – Glen Drago: STBT Trade Book Part 2 Between 10555-10570 spot Nifty levels mentioned
2/27/18, 9:40 AM – Glen Drago: STBT trade book part 2 @ cmp
2/27/18, 9:40 AM – Glen Drago: confirmation STBT Trade booked part 2 @ cmp
2/27/18, 9:40 AM – Glen Drago: Nifty Hold 4 Parts positional shorts as told
2/27/18, 9:40 AM – Glen Drago: Nifty hold stbt trade 1 part shorts as told
2/27/18, 9:40 AM – Glen Drago: will keep updating if anything needs to ne done
2/27/18, 9:40 AM – Glen Drago: will keep updating if anything needs to be done