Nifty Today’s Trend, Prediction, View, Target 2nd Nov
Nifty trend today was that of consolidation so it is just a pause that has been formed in the market and as per my analysis, prediction and view the trend for now remains that of a pullback but do keep in mind that the trend can swiftly change from a pullback trend to a fresh bullish cycle trend and move for higher targets so please keep that in mind. As things stand as of now I do not have any confirmation that a fresh trend has started and that we are heading for higher targets.
Let us look once again why I feel a fresh trend could begin. The reason is India’s macro’s that were deteriorating at a massive pace has now turned reverse and that is India’s macro’s are improving at a decent pace. Take for instance Brent Crude Oil which was at 86 (we did mention openly that short term top is in place) and Brent crude oil has broken an important support level and now is heading for lower target of 66 (Please keep in mind that I am not suggesting for one minute that Brent crude oil of 66 will be done tomorrow) but what I am saying is that top is done and price will keep making lower tops and lower bottoms and keep moving towards the 66 target area so since crude oil falls this becomes a positive for the current account deficit as well as the fiscal deficit so which in turn will end up supporting the rupee so falling crude oil prices and a minor bullish trend of appreciation in the rupee towards 71-72 will surely act as a tail wind from a macro stand point. To add to this scenario we have stocks which have corrected significantly and are at a decent support area in terms of valuation so there is good degree of safety in terms of valuation also (maintain that in some pockets we have deep value which was not present since past many years and there are some results which are surprising on the upside). So in a nutshell. A combination of Improving macros, cheap valuations and positive earnings surprises these factors generally come together and take place around the end of a bearish phase and not in the middle of a bear market.
From a technical analysis standpoint Nifty has resistance around 10410 spot Nifty levels and as per open interest data bulk of the market has massive short positions so we could see a short covering rally over the next few trading days. The move could be very sharp on the upside as some international funds may start deploying cash in India aggressively so a combination of buying pressure and short covering could create massive short covering rally in no time. If you are short then and your view is to remain short of sell on rise do keep in mind to hedge your shorts above 10410 spot Nifty level.
Good Trading To You!