Nifty Futures 19th March 2018
Nifty Futures today moved lower and once again touched the 10210 area. For the time being, we have got out of shorts positions which we had built around 10900-11000 area because we see Nifty Futures moving in a range bound manner between some levels however the move will be in a zigzag manner and in a choppy fashion so trading in and out will require proper timing. The ideal way to trade the move will be through options and selling options should be a good strategy for now from a near-term perspective around specific levels but keep in mind that these pullbacks as per our analysis will not last and the main trend will then resume much faster and we are not in the camp that markets are heading for new highs nor do we see any great menigull pullback or rally, it is just that some technical factors could play out in the near term from a longer term perspective we do not expect any bullishness from the Indian stock market for now or at least till the earnings start picking up and we are surprised at the earnings estimate that the street is working on right now so we will review the earnings front post April. From when and where to trade counter trend and till where we will keep guiding our clients on the same.
The results season will be here soon and during the week Reserve Bank of India banned the issuances of LOU now we see exporters taking a hit because of this move, not only exporters even small and medium enterprises will take a severe hit due to lack of liquidity and do expect to see the effects of this in the coming results season. The management commentary will become very critical as that will be a very important barometer to see and will give a sense of how the business is getting impacted on the ground. Many of the analysts are expecting sharp pick up in earnings but the real problem is lack of demand and we do not see sustainable demand coming back to the market in a hurry. Rural distress is causing lack of demand from the rural front. Also, we do see inflation both food-based, fuel-based inflation, and service lead inflation hitting the market not to mention that the higher cost of capital will dent the bottom line of many companies both large cap and small cap and this is one of the primary reasons for the Indian stock markets underperforming the global stock markets.
On 22nd March 2018 Mercury the planet of information will go retrograde so we do expect some sharper zigzag movements from 22nd March onwards keep that in mind. Information or news that will come out during this time should be verified before you act upon them. Avoid rumours and heard mentality trading especially during this time frame this false information or rumours based information stuff will be aggravated by Sun trine Rahu (North Node) so this will also create false news and will create a misleading environment to be more precise it will create an environment of deception so be careful and trade only on what information you are sure better still trade clearly only on analytical information or data.
Good Trading To You!