Nifty Today’s Trend, Prediction, View, Target 22nd Nov
Nifty today’s trend was bearish but in the coming days we expect Nifty ‘s trendto be choppy and sideways between some range (details of the range have been given to our clients). The current time cycle generally does not create any major trend and there is a high historical correlation for the zigzag movements to take place in this time cycle and that is what we see as per our prediction and view.
Part of what we sent yesterday to our clients.
Nifty has a consolidation area between ——- and I do not see this area breaking. On the downside —— is the support zone while on the higher side —- is the target zone. I expect Nifty to move within this range broadly speaking for the next 2 weeks. Many of you are seeing Dow & S&P 500 and getting worried about the market but keep in mind that S&P 500 though has a historical correlation to Nifty but in the year 2018 this correlation has not worked. What S&P has done and Nifty has done both in terms of wave counts and moves is totally different so do not look to the S&P 500 and get bothered.
Now let us understand where we are placed in this overall scenario. Indian stock markets were underperforming the world markets for the first half of 2018 calendar year because of the crude oil and the rupee factor. Crude oil was consistently moving higher and creating pressure on the CAD which in turn was pushing the rupee lower and now we have the exact inverse scenario Now, both crude oil and the rupee are favoring the Indian stock market and hence I see great outperformance from the Indian stock market over the next few weeks. (though will be choppy as said between —– on lower side and —- on the higher side).
Indian macro’s have improved considerably and will continue to improve at much more faster rate than what the street is estimating. For e.g. No one expected crude oil to fall 27% in just few weeks (I predicted the top @ 86 but even I did not see Crude oil falling so sharply) so this will force many of the FII’s to change their India rating to BUY or at least neutral, it will also force many of the DII’s and PMS funds which are sitting on cash to deploy as Indian macros are improving drastically and that will create a storm of money coming for the Indian markets (especially in a back ground where valuations overall are reasonable and there is a macro tail wind which will ensure that earnings growth picks up) so take any parameter that you wish to each factor be it crude oil, rupee is favoring India, not to mention the falling bond yields are a indication of falling inflation, inflation remaining lower than RBI’s expected projection or comfort level of 4% will ensure that Monetary policy committee will change stance to NEUTRAL and their commentary will be very dovish in the Dec meeting. I wont be surprised to see CRR cut in order to boost liquidity in the system also. Coming back to the overall point although the world markets are falling and S&P 500 is nearing a major support but I do not see Indian stock markets moving in line with the world stock markets, I see massive outperformance in the coming weeks. In fact I see a scenario where S&P 500 will bottom in a day or two and will start moving higher this will create a great tail wind so what I see is this stable to mildly bullish world stock markets, crude below —- Brent, Rupee around —- so a cocktail of all these factors = —— in the next 2 weeks.
Revise our USDINR target —to —–. We do not see USDINR pair moving higher than —- in the near term and on any rise we recommend selling the pair for lower targets of —–. In the very immediate term we could see a minor bounce of few pips higher but we will be using that to sell the pair. Even under most extreme conditions also we do not see any move above —- in the short to medium term. Importers should not hedge in the near term while exporters are advised to keep continuous booking to expand margins.
As usual if you are only trading on the basis of this post please use your own risk management and then only trade. Please do not over trade and keep your risk in check at all times.
Good Trading To You!