Nifty Today’s Trend, Prediction, View, Target 9th Nov
First of all I would like to wish everyone a very happy Diwali and prosperous new year.
Nifty today has been consolidating. As per my prediction, view we see higher targets coming in the short to medium term and buying on dips towards supports should be done. Over the past few days or rather past few weeks there has been some massive fall in the markets from 11760 to 10000 levels and the ferocity of the fall has rattled sentiment in fact the fall has forced some of the most bullish or every bullish people have turned around some of them have become neutral or some of them have even turned bearish on Indian stocks for the next few months. Many investors feel that Nifty and the broader stock markets will correct even further from current levels and fall sharply even further from here (what happens to the Nifty is a trading call but from an investors perspective do keep the below points in mind before you take your own call)
Indian Macros are improving much faster than what the street is estimating.
Depreciating rupee which was a major macro headwind has stabilized and as per my prediction, view is heading for targets of 71-72 in the next few months. I am not saying that the final leg of depreciation for the rupee is done no I am not saying that but for the time being we said this when the rupee was at 74 that we do not see rupee sustaining above 74 in the near term and we see a pullback towards at least 71-72 so in the next few months perspective we do not see rupee giving Indian stock markets a problem. Longer term we could see the rupee moving lower than 74 but for the time being we will work with 71-72 target area and we will review that once our targets of 71-72 is done on the rupee. So do expect the stable rupee to act as a tail wind for the Indian stock markets.
Crude Oil which was a major macro has also topped out as per my prediction, view and is now heading for a target of 66 in the near term. Once again I am not saying this now I have clearly mentioned this while crude oil was at 66, When Brent crude oil was at 86 everyone suddenly became bullish and gave targets of 100 on crude oil but in reality that was the peak of the crude oil cycle and in a matter of days we have crude oil almost 17% lower than the price we did see a few trading days back so what was a macro headwind should and will turn into a macro tail wind for the Indian stock markets.
Deep Value in some select stocks. Many of you have been asking me how much more will the Nifty fall and but very few people are asking me what is the good level to enter the Indian stock market. The answer to that is do not look at the Index if you are looking to invest because the index is not showing the reality and has been perfectly stage managed. The Index shows a price of 10557 spot Nifty level but in reality the broader stock market has already reached levels and prices of 6000 Nifty. Many large caps, mid caps and some great business have corrected anywhere between 90-50% and that means Index is not showing the reality so please do not look at the Index if you want to invest look at individual names and be a stock specific buy high quality names with good management and low debt companies and you will end up making good money.
Turn around in earnings cycle. Let us take an e.g. some of the PSU banks have reported better than expected numbers for the first time in many years, their slipages which were a problem have seen reversal For the past 4 years we have been saying that we do not see earnings growth. Now for the first time in last few years, NII has started imporoving and asset quality stabalized now all this is a sign of reversal when stock is at the bottom.All that I am stating that yes earnings growth will start picking up one by one sector by sector and then stock by stock. Yes it will be a combination initially of low base effect playing out but that will be the starting point please keep in mind I am not suggesting that everything will just turnaround tomorrow morning no I am not suggesting that but one by one there will be earnings turnaround and in the names which I have suggested we are already started to see the turnaround and that is why we are getting these companies so cheap, now many of you will say the on ground liquidity situation is extremely bad, people are losing jobs, car sales have slowed down, some of the every green bullish investors have become very gloomy and losing confidence in the earnings pick up etc etc and I am very well aware of that but all this issues and problems are in the price today and this is the part of the night which is the darkest hour. I say this because all the problems which we had identified since past few years are now openly been discussed and being fully felt on the ground which means that it has played out and we have actually hit the rock bottom so do go out and buy there are many stocks which are massive multibaggers from these current prices. Do not get swayed away by the sentiment. These people were bullish at 11500 and now they are bearish at 10500 does not make sense to me. Frankly there is some major astrological reason because of which some of these guys are sounding so pessimistic so do listen to their interviews post Nov 19th 2018 and they will suddenly become optimistic once again.
From an astro cycle perspective Jupiter will move to scorpio as per western astrology system and in my historical correlation this results in tops being formed and this is surely one of the reason why I feel that another round of bull is pending in the market.
In a nutshell a combination of Indian Macro’s improving, Sentiment being at the lowest end in almost past 4 years, Low Inflation and bond yield coming off which means that further rate hikes will not take place from the RBI and their stance will change to neutral stance in the next policy meeting, first time in past so many years there is bottoming out all the problems which were in the background have come to front and have been priced into the market all these combination always take place when a bearish phase is ending not at the mid point of a bear cycle. Having said that it now important to understand clearly where we stand.
Nifty as per my prediction, view is going to move higher first towards —–+ within the next 6 months. You can call this move whatever you would like to be it pre election rally or whatever you feel like. The negatives of BJP loosing state elections and all other negatives like RBI problems are in the price and I do not see any fresh problems from any segment going forward. Banking stocks like Icici Bank, Axis Bank will lead this rally and head for higher targets.
Good Trading To You!