Nifty Futures / Indian Stock Market Today’s Update 10-4-18
Nifty Futures today continued its bullish move that we were expecting it to do right since 10000 levels. The sentiment on the street now is getting very bullish and in sharp contrast to that, we had around the 10000 levels. Around 10000 levels most market participants were convinced that Indian stock market is in a bearish phase and everyone was talking about levels and targets of around 9700-9500 and in just a matter of few trading days everyone is now talking about levels of 11,000 some are even talking about levels as high as 14000 and the general consensus on the street as of right now is that Indian stock market has made its bottom for this year and Nifty Futures is heading higher for 11,000 area. Now we had mentioned around 10,000 levels that though longer term we remain bearish on Indian stock market but in the near term, we do not see much more downside as the near term selling was overdone but just for that time frame that was our view when Nifty Futures was around 10,000 levels.
So what should we expect in the near term? In the near term we would just advise all the readers of this website that do not get carried away by all the bullish talk around you. At the end of the day earnings growth has to kick in for a sustained bullish market and earnings has not picked up for the past 4 years now so it has been a someday sometime phenomena that has been going on in the Indian stock market but even more importantly is one factor that most people are missing is that even if earnings improve or start improving marginally from now onwards which is a good possibility due to the lower base effect and some other factors the point is that markets have already factored in high growth and hence are at such a hefty valuation stand point even now so the hypothesis that minor earnings growth will take care of the current run up does not hold good with me so be very careful because the kind of multiples at which some of these or rather most of the broader markets are trading at we do not think the mid cap and the large cap universe is leaving anything on the table and that’s assuming a resumption of the high earnings growth that most of the market participants are expecting so be very careful. Keep taking profits and book out of portfolio for now on the rise and avoid getting too aggressive as markets as per our understanding will give much better price points to enter. Remember time and again over longer durations in time no one and we mean no one in the history of the stock market have made money buying expensive. You may take any persons portfolio and see they have always made money by buying cheap and not the other way round and we see that we will get much better value or rather deep value in the coming time.
Crude Oil we booked profits today in our shorts that we had built around the 4300 area in MCX and now we will wait and watch for a few days. Nifty Futures in the near term could get a bit more choppy and could move in a zigzag manner in the next few days so be very alert and trade in and out.
Good Trading To You!