Nifty Futures Update 3rd Nov 2016

SGX Nifty Futures

LTP   10,940.00   +26.00 +0.24% High 11,041.50 Low 11,001.00 (Change Vs Today’s Nifty Futures (NSE) Closing)

SGX Nifty

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Nifty Futures Update 3rd Nov 2016

Nifty Futures / SGX Nifty was seen trading weak today after news flow that Mr. Trump has got a slight lead in the latest polls in the run up to the US Presidential Elections. As per our analysis we have been saying that pullbacks will keep coming from time to time and we maintain that view but the bias will be on the downside. Pullbacks will not sustain and prices will eventually keep moving lower by making lower tops. As of now the support area around the 8550-8500 has been tested almost 4 times and we do not see the support holding out for long having said that keep in mind that periodic pullbacks will keep coming from time to time so overall it will be a very choppy trading environment.  As we have guided before also if you are trading only on the basis of this post please use appropriate risk management as deemed fit and then only trade. If we see a tactical trading opportunity then in that case we may even choose to trade counter trend if we see the risk reward ratio favoring us. By our overall view which is bearish that does not mean that we may not take tactical trades from time to time and we may choose to take those tactical trades and may not report them here. So if you are not our client then please manage your own risk and trade. Please never over trade.  Nifty is expected to keep being very choppy in the immediate term so once again please manage your own risk and then only trade if you are not our client.

Today the all important FOMC meeting will tell us if the FED moves rates higher by 0.25 Bps or pushes the can down the road to Dec. As we have mentioned in our previous update that it will be irrelevant what the FED does as regardless of the outcome today markets will begin a risk off trade. (If they raise rates today then the market will sell off as it was not anticipating that move by the FED, if they guide for Dec rate hike of 0.25 bps then also the market will sell off as the markets will start factoring in a Dec 2016 rate hike). So as you can see in either conditions we expect markets to behave with a down ward bias.

The results season has not been good for Nifty 50. That further puts a valuation cap as whatever valuation safety was on the table has been taken away so now we are in a situation where most analyst and most brokers keep saying we hope growth will pick up but we do not see that happening and we time and again are saying this that from a historical stand point no one has made money in the markets by buying at such hefty valuations. As a follower of Gann theory we have learnt that Future is nothing but a repetition of the past and that there is nothing new under the sun so every single time the markets have not rewarded investors in the past and we do not see that this time also it will be any different.

Good Trading To You!