Nifty Futures / Indian Stock Market Update 4th April 2018
Nifty Futures today continued it’s bullish move post the early morning volatility that was seen along expected lines. Yesterday S&P 500 was collapsing in the night and even SGX Nifty was moving lower at one point SGX was down by around 100 points but Nifty Futures today did not play follow up or in other words Indian stock markets outperformed the world stock markets and that has something to do with a very important astro cycle which is of prime significance as of now. Mercury is almost now at midpoint in its retrograde cycle so markets which did not reverse at the start of the retrograde period generally but not, as a rule, do reverse now (by the term reverse we mean counter-trend move) so if we look at the s&p500which is leading the fall in global stock markets for now it has not reversed around the start of the retrograde period so now is a good time from a historical correlation standpoint for the market to reverse and give some pullback. Not only is this a factor that will be seen playing out in the Indian and global stock market in the near term but the current positions of the sun and moon and mercury mid point all are suggesting that even s&P500 will move up in the near term and give some sort of a pullback between 3-5%. We are not of the view that any major pullback or bullishness is on the cards but we do expect the current fall in global and Indian stock markets to halt in the near term and some sort of pullback to play out but once again we reiterate that do not mix the near-term view of pullback with longer-term view of bearishness in the Indian and Global stock markets. Longer term we do not see any bullishness for India and we do not see any great value available as of now to invest in stocks or equities as an asset class. It is only once we see deep value in stocks we should start buying not before that.
From Indian stock market perspective / Nifty Futures perspective we do not see that in the near term much downside will take place sure there will be bouts of volatility and some zigzag movements will keep taking place from time to time. We are not suggesting that choppy movements will not happen sure they will but eventually, in the near term, we do not see markets moving much lower from here because we see that the near term selling and price damage is overdone but just in the near term. For the Indian stock markets to keep moving higher on a sustainable basis we need to see earnings growth picking up drastically we say drastically because most of the market has already priced in moderate growth into the current prices so if price has to give net positive returns from current levels we have to see sharp earnings growth and we do not see any sharp pick up in earnings we do see some pockets which could be stabilizing but the broader markets are not looking great from earnings perspective in the near term. Those who are stuck in the portfolio should reduce net longs in their portfolios and wait for better prices from a traders perspective be very nimble footed and trade in and out in the near term. What are the targets for the upper side? When to get back to sell side? All these questions we will keep updating our clients in live markets.
Good Trading To You!