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SGX Nifty 17th Aug 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. PLEASE DO NOT OVER TRADE.
SGX Nifty / Nifty Futures today continued its overall sideways consolidation but with increased volatility. Earlier in the day Nifty was seen holding higher but post the inflation numbers Nifty did see a sharp crack only to have a flat to negative closing. As per our Indian stock market analysis we are once again saying that the bear market which started on 4th March 2015 is not yet done and it is about to resume and there is still one more down leg remaining which will take Nifty much lower from here and hence this is not the price and time to buy. We have look at various case studies and we are very clear that no one since 1991 has made money buying at such hefty valuations. The current rally has been going on supposedly due to excess liquidity and we do not think that central banks around the world would be able to keep rates lower for much longer time now, in fact we see a FED rate hike faster than most people are anticipating. As we have predicted we see a sharp rise in inflation worldwide and India is showing the exact same trajectory. There are two parts to this the rate of inflation and rate of change of inflation, the latter being very high along our expected lines and in the coming days we do expect inflation to keep moving higher. Please understand that we are not suggesting that every single month inflation will keep rising but the overall trajectory will be higher that is what we are saying on the basis of our astro cycle research and when inflation will rise sharply no central bank in the world would be able to keep rates lower which in other words will suck out the liquidity from the system. The cheap printing of money the world over has resulted in all asset classes getting inflated and that in turn is actually hurting the real economy to recover since all the cheap money has already inflated real estate and equities now that cheap money is walking into commodities and especially agri commodities which in turn will fuel greater inflation.
As far as our stock picks go we continue to remain bullish on MSL, Renuka sugar, Bajaj Hindustan, Tata coffee. We could take some tactical trades in some other sector which will blast higher due to one of the commodity moving significantly higher from here or we may even directly take exposure to that particular commodity. There is till a few days to go for that but we sure will take some exposure to that trade. Crude Oil is on a roll and we see crude oil moving much higher from here. There could be one panic in crude oil in the near term but overall we will see a rising trend in crude oil (when to buy where to buy how much to buy etc all details to clients. ) If you are only trading on the basis of this post please use appropriate risk management and then only trade. We may choose to enter and exit as deemed fit in crude oil. We are sharing our view here. Just please keep that in mind. Silver also looks good but we have not yet got our final confirmation for the next leg of the rally but we have it on our radar.
Good Trading To You!