Nifty Today’s Trend, Prediction, View, Target 31st Dec
Nifty today’s trend was that of pullback like that has been seen over the past few trading days. As per my prediction, view we remain of the view that we will see lower targets over the next few days and that we do not expect to see Nifty sustaining on the higher side although some more days of time pass is easily possible for our stock markets and Nifty and Bank Nifty thanks to holiday season and most of the major institutional desk on a holiday. Global stock markets have been giving a pullback over the past few days but keep in mind that as per my analysis, view and prediction this current move just remains a pullback in a larger downtrend and please do not mistake this current pullback as a new trend or an uptrend. In India our stock markets have also have been giving a bounce back after some sell off I would not say a sharp sell off because as of now Indian stock markets have outperformed the world stock markets by an excellent margin thanks to lower Brent crude oil prices and stable rupee however going forward in the coming days our prediction, view is that Indian stock markets will now change gears and now start leading on the downside for immediate lower targets of —- so we do not see that buying or accumulating on dips as a good strategy we do not see Indian stock markets holding out for long now and post – Jan 2019 we see Indian stock markets starting to lead the global stock markets lower and starting to play catch up with the global stock markets so if this scenario starts playing out then the downside gates are open.
Many are asking me why I am not bullish on the stock markets in the near term well the reasons are many and I am just writing a few here. As per my view the best of lower Brent crude oil prices is in the price the same goes with the rupee and also bond yields (these three factors have been the pillars of the move from 10000 to around 11000) but now we see these very tails winds becoming head winds so we do not see how the markets will move against them. In addition to these factors global stock markets are now in sharp down trends, please understand that I am not suggesting pullbacks will not come in global stock markets sure we will have pullbacks in all global stock markets and I am not suggesting even remotely that the fall will be a straight line fall but after the pullbacks happen the main trend which is down will resume and prices and indices will head for lower targets. I do not see a possibility where global stock markets are having a risk off trade and Nifty stays where it is let alone move higher, once again there could be a degree of minor outperformance for a few more days but after that we see Nifty playing a leading role in the down move so going forward the headwinds of crude oil, rupee , bond yields moving higher, falling global stock markets, will surely haunt us but even more alarming will be the sharp slowdown we will see in earnings (yes I do see earnings bottoming out for many companies in the next few quarters ) but this will be the real hit that the stock prices will take that’s because many brokerage houses were estimating 18-24 percent earnings growth at the start of this year and the reality is even if we get 5 percent earnings growth I think we will be very lucky so the earnings downgrades have not been factored in as of now but the sharp slow down because of a bottoming cycle in earnings will also make the market look very expensive at current levels and hence we do see patience running out and money moving out from the stock markets in the next few months, in addition to this there is a possibility of a cocktail govt formation in 2019 and although I do not see any major impact on earnings due to whatever Govt is formed in 2019 but in the near term that too could lead to a risk off in the markets because many traders and investors would start getting light on portfolios ahead of the event now I have just mentioned a few factors and the combination of all these factors don’t look good for the stock markets neither from a global perspective nor from a local perspective so our advice to our clients is to be on as much cash as possible and wait for deep value. (we did get some good deep value when Nifty touched 10000 we did buy and get out 25-35% higher) but as of now there is not much value available so our view is that wait for that lower targets and deep value to emerge the combination of these factors don’t suggest that much money will be made in equities at least for the first half of next year or till we do not see deep value emerging in stock prices. As unusual 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 please always keep your risk in check. The combination of factors could see Nifty and broader portfolios down by anywhere between 10-30% if not more so be very careful from current levels. From a technical analysis perspective we see Nifty resistance around —- levels so until and unless Nifty does trade above these levels we do not see any upside in the near term. The trend remains down for the time being but thanks to the holiday season there could be some choppy moves coming so be very nimble footed in the near term. Bank Nifty also the picture is the same in fact Bank Nifty looks more weaker than the Nifty to me and the selloff in Banking stocks could be more sharp than the Nifty so watch out for Bank Nifty as it could lead on the downside and act as a leading indicator well before Nifty turns lower. We do not expect Bank Nifty to move above — and see lower targets of — in the Jan series for Bank Nifty. The rupee also has done its bit and by Feb 2019 our prediction for rupee is that it will be well above 73-74 area I won’t be surprised to see rupee above 75 also during this time.
Good Trading To You!