Nifty Today’s Trend, Prediction, View, Target 18th Dec
Nifty trend today was bullish and Nifty has continued to move higher but the area around 10900-11000 spot Nifty is a critical area and unless we have Nifty clearly moving above that area we do not suggest to get too adventurous for the time being. Let us look at the overall scenario now over the past few trading days there have been lot of events and news flow frankly has been negative and does dent the upside potential for the markets.
As per my analysis, view prediction we see a strong resistance for the Nifty around 10900-11050 spot Nifty levels mentioned, until and unless Nifty moves past this area with volumes we do not suggest any aggressive buying, rather forget buying it will be prudent to avoid buying altogether and it will be prudent to book profits around these levels. The news flow over the past few days (BJP losing all 3 states, problems between the Govt and RBI and then appointment of Mr. Das as new Gov to RBI all these are fresh issues don’t help a bull case for the market from a broader investing scenario, stock specific it’s a different story where earnings visibility is good and stocks have reached deep value but overall the news flow and current developments are not supportive of a bull case much above current levels). Anyways, our near term view and prediction and advice is to book profits in longs built at lower levels and stay on cash. From a traders perspective some option trades can be taken.
USDINR pair also has reached an critical area. Regular readers of this website are well aware that around 74 we had clearly mentioned that from 74 we see lower levels of around 72-71 and we had revised our downside targets to 69-70 which has been done, now looking at the current move in the usdinr pair and also looking at dollar index charts it does look like usdinr is once again resuming its uptrend and if that does happen then we will not be surprised to see levels of 75 by end of Jan and this is not a conducive environment for equities. USDINR moving towards 75 will create pressure on the markets. In addition to this crude oil also we had predicted a top at 86 brent and we don’t see much downside from current levels but at the same time I do not see much higher levels for crude so overall as per my view we see crude oil moving in a range.
A minor recap. Around10000-10100 we were very bullish and we were putting out first target of 10850-11050. Anticipating the rise we had bought Icici Bank @ 295 Booked part @ 327 and rem @ 265 , PFC @ 73 booked part @ 84 and rem @ 103, Ktk Bank @ 93 and booked @ 105, BOB bought @ 102 and booked @ 112, Tata Motors bought @ 170 & booked @ 190, Bank Nifty bought @ 24400 & booked @ 26500 and a few more trades had been done all of which did make excellent money. Now the point is that although Indian macros have become much more stable than a few months back yesterday we have seen a breakout in the Dollar Index which effectively means that Dollar index in the near term is heading for 100-102 area which means that this will put a lot of pressure on the emerging market currencies and the Indian rupee will be no exception to this. So when we do look at the USDINR pair we see that Rupee will be depreciating towards the 73-73.50 area rather quickly in the next few trading days and this will put pressure on the Indian stock markets. Also, Brent Crude oil has fallen in a straight line from 86 in line with my predictions and view but now we do not see the fall being one sided and there is a good possibility of a decent pullback so a combination of rising dollar index and falling rupee and a bounce back in the global crude oil prices will surely act as a near term headwind, to add to this S&P 500 and global stock markets are in a sharp downtrend for the time being and although Nifty has ignored the S&P 500 for the past few trading days but we do not see the inter market divergence to continue for long and we expect Indian stock markets to start aligning up with the global stock markets so the scenario is this. Short term macros could be impacted and falling global markets could add to the pressure. In addition to this Indian stock markets are at a stiff resistance area of around 10900-11050 and also the pullback from 10000 levels has been a slower move and seems or rather is a corrective move so keep that in mind if it is a corrective wave which it is looking like at least optically for now then we could resume down move and align with the global stock markets. We will update our clients as to what positions to take in order to benefit from this move. Please keep in mind I am not suggesting for one minute that the final top is in place sure we could rally a bit more but will the rally for the time being be sustainable I do not think so.
Good Trading To You!