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SGX Nifty 14th June 2016
PLEASE NOTE THAT THIS IS MY OVERALL VIEW ON THE NIFTY AND THAT DOES NOT MEAN PRECISE ENTRY AND EXIT POINTS WILL BE MENTIONED IN THIS POST. IF YOU ARE TRADING ONLY ON THE BASIS OF THIS POST PLEASE USE APPROPRIATE RISK MANAGEMENT AND THEN ONLY TRADE.
SGX Nifty / Nifty Futures today continued to fall and as per our Indian Stock Market analysis our overall Nifty view / Nifty Prediction remains the same. We do not expect upsides to last and we expect downside to continue. (Please keep in mind that Nifty could do some time pass around these levels also that situation is also possible and I am not denying that but overall the risk reward now is favor of booking profits / selling not buying at all). Inflation numbers are about to come out today evening and we will update more on them later in the evening. Keep in mind that we do not concur with most analyst who say India is in a bright spot as rising Inflation now puts a cap on the ability of Reserve Bank of India to cut rates in fact as they had mentioned in the last policy there is a upside risk to inflation and if that does happen then please keep in mind that instead of rate cut there will be a rate hike. I am sure if a rate hike does take place or even the realization that it is entirely possible for a rate hike in India then that will change the entire game. Global markets are showing a breakdown sign and in the time to come they all will collapse if not correct sharply and in that kind of a background we do not see India doing too good. Bottom line is too many factors show us dangerous signals. Multiple factors and indicators we study show India is getting into some serious trouble and if immediate and drastic correction is not done then consider the collapse imminent.
From a technical stand point decline speed if starts accelerating then we will have some minor adjustments to make in our overall wave counts (no matter what Nifty does the move will be towards the lower side. It is just a matter of time)
Today was more of a day for our stocks. Ugar sugar has doubled since we have recommended buying in just 3 months time. Renuka sugars gave a positive breakout too today. Tata Coffee was also seen doing very well in trade. We maintain Buy on dips in Msl, Tata Coffee, Bajaj Hind, Eid Parry. All these stocks will do very well in the coming time. (Please note that when to buy where to buy how much to buy all details to our clients) If you are trading only on the basis of this post then please keep your risk management in place and then only trade. If you make money your takdir, if you lose money also your takdir. I don’t want credit and thank you if you make money in them nor will I listen to your bullshit if you do not make money in them. Trading / investing in the markets has a risk element to it and if trading / investing does not suit your risk appetite then you must not trade / invest in the markets. Please keep that in mind before your follow our advice. Our track record has been very good but that does not make me God I too am human and I too can go wrong. Bottom line is please keep your risk in place and follow us if you are following us without being a client. We are in the process of releasing our new multi bagger calls (in final process of short listing) and those who wish to avail them may please join our service if you feel so. As far as our clients go will update all details to our PAS clients in the next few weeks.
Retail Inflation data 5.76.% vs 5.39%. Most of the analyst / Fund managers are talking about India being a sweet spot but we do not feel so. Let us look at the reality.
a) Inflation rising for 3 months in a row effectively closes the prospects of rate cut in the near term
b) Crude Oil import bill up by almost 100%
c) IIP numbers -0.8
d) Exports now contracting for over 16 months in a row, imports also seen falling in the past 2 months
e) Credit growth showing a declining trend
In such kind of a background we do not see Indian Equities doing well from here on at such hefty valuations. Indian Macro’s are deteriorating not improving for now at least. Unless the fund managers are using a crystal ball to predict the improving macro trend. Extreme caution is advised in fresh buying at current levels.
Good Trading To You!