Nifty Today’s Trend, Prediction, View, Target 20th Dec
Nifty today’s trend was bullish. As per my prediction, view we remain of the view that fresh buying must not be done as of now and getting out on cash will be a prudent strategy. Regular readers of this website are well aware that around 10000 levels on Nifty we were very bullish and we had clearly mentioned aggressive buying in many stocks however our targets at the point of entry were around 10850-11000 and those targets have been meet and targets have been achieved, Even as far as bank nifty is concerned we were recommending very aggressive buying around 24000 Bank Nifty levels for targets of 27200 and that too has been achieved so the important question is what next from here?
Let us look at the situation analytically because there are many events lined up in the next few months and regardless of what people say there will be near term volatility due to those events. First as of now let us look at the sentiment. The sentiment on the street is extremely bullish every person is talking about levels of 12100 and a pre-election rally and some are talking about a pre-budget rally whatever most of the traders are talking about everyone is talking about higher levels and for no apparent reason anyways that is not important why people are talking about higher levels but the general sentiment is very bullish on the street so this is a alarm signal for most of the traders. In addition to the sentiment most of the tail winds that we have been indicating in terms of Brent crude oil moving lower and a stable rupee are factored in the price more or less but the important point is that the best of the crude oil gains is in the price and the easy money has been made in crude oil and in the next few days onwards crude oil will start a pullback so when it does start a pullback it will again become a short term headwind for the market and also the breakout in the dollar index will eventually take the rupee well past levels of 75 so in a nut shell even this factor of the rupee which was acting as a tail wind will once again start acting like a headwind besides these factors although I see a earnings bottoming scenario for some companies but most of the companies will report lower than estimated earnings in the coming few quarters and that too will take away the valuation safety that is currently available so when we put all this together it becomes a dangerous cocktail for risk on assets and that’s not all we are about to see some major populist incentives from the Govt on account for farm loan reduction in GST rates for some segments etc and when this is going to happen we have seen from a historical stand point that risk on assets have not done well. There are many other factors which are going to affect the market all of which do not suggest that there will be any major upside in the coming few months in the run up to the general elections. All I am trying to convey is that although near term trend is as of now up and our targets have been achieved we do not suggets becoming ehuphoric at current levels the next few days are critical for the markets and do watch out for the market moves.
As usual if you are only trading on the basis of this post please use your own risk management, always keep your risk in check and please do not over trade.
Good Trading To You!