Nifty Today’s Trend, Prediction, View, Target 21st Sep
Nifty Futures trend continues to remain down and markets are making classic lower tops and lower bottoms but keep in mind that sharp pullbacks will keep coming from time to time and do not get carried away so a good strategy would be to keep taking regular profits and keep selling again on bounce backs towards resistance areas or selling on pullbacks would be better. Nifty today continued its down trend showing weakness mainly on account of the rupee which once again was nearing the 73 area though Reserve Bank of India did intervene strongly by selling dollars through some of the public sector banks but if the RBI intends to defend the 73 area much more aggressive intervention would be needed and we could see that aggressive intervention around Friday-Monday but even though RBI is expected to intervene aggressively in the next few days we do not see and feel that the level of 73 would be defended for long period of time because the dollar demand is very high both from domestic importers as well as FII selling is creating massive dollar demand so in the near term though we don’t expect 73 to be taken out (because of the strong and aggressive intervention by the RBI) but eventually we will see 73 being taken out. As far as the Nifty is concerned this intervention could lead to some sort of a pullback and that pullback can be used to sell fresh in Nifty but keep in mind that keep a trade in and out strategy and do not adopt a sell and hold just yet. As we have mentioned in our previous post and predictions that there will come a time when sell and hold will do well but that time is not yet here so trade in and out for the time being.
Also, keep in mind that some of you had called me and were asking me why is the rupee depreciating like this ? The answer to that problem is fiscal deficit and current account deficit but even though these are the primary reasons for the depreciating rupee there are also some other problems which we will see aggravating over the next few months which is a currency war across many countries. We will see competitive devaluation of currencies and Indian rupee will also be a part of that.
Near term Nifty trend remains down. Our prediction, view is that sell on rise and book profits in panic at lower targets. There are many who have been asking me about the RBI policy meet in Oct and what is our view with respect to that. Our view is that RBI will raise rates by .50Bps in Oct keeping the rupee in mind (we know that many of you will not understand this but frankly whats going to hit the RBI over the next 2-3 weeks will force them with no other option but to raise rates higher by 0.50 bps) We will discuss more on this over the next few days.
Good Trading To You!