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SGX Nifty 21st Oct 2016
SGX Nifty / Nifty Futures continued its consolidation. As per our analysis we do not see upsides going to sustain and by this we do not mean that price can not retest 8740 area sure it can but the larger point that we are making is that it wont hold for long as the main trend has turned lower. When we do a objective analysis we can clearly see that price area of 8550 has been taken out and post that we have had a move very similar to that of move that started from 8550 area towards the 8800 area but post that pullback once again Nifty started falling. In a similar manner we do not see these levels sustaining and we see prices moving lower. Regular readers of this website and our clients know that our eventual target for the Nifty is at 5872 and we see that coming and we do not see that target coming directly there will be pullbacks which will be very sharp in between the down fall but overall price will keep trending lower. As of now corrective move is on and it should end shortly post which we will begin the down move. Keep in mind that move on the down side will not be a straight fall in the starting phase it will be a zig zag movement and we expect markets to behave in a very similar manner to that of Mercury retrograde period. (we have explained multiple times what happens during a mercury retrograde so you can read the previous post to see all details pertaining to Mercury retrograde). Jupiter is in Libra and that is creating a swing between both bulls and bears and hence we will keep seeing both side sharp movements in a zig zag manner. We do not expect a one sided rise nor a one sided fall. Please keep that in mind. 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 and kindly manage your own risk before trading.
As far as investors go we once again reiterate our view that these are not prices and valuations to buy. In our case studies we have always seen investors who have made big money over time have always bought the stock at very cheap valuations and we do not see the current valuations cheap by any yard stick so we once again reiterate that we do not see any investor making money buying the broader market stocks at current valuations. There will be some exceptions to certain stocks which have deep value or are under going some transformation in terms of technology and our next multi bagger is coming from that space. When we identify a great value buy we have to do multiple levels of checks and as of today we have sent our research guys to the plant of the company to see how the expansion in capacity and other raw material cost will be working out in the next few years there by once we have done all the final checks in place we will update that to our PAS clients.
Ugar sugar is now at a good price and can be accumulated below 38. We see good value in this stock in the coming time. Renuka sugar is also at a good price and below 16 can be accumulated. Both these stocks will do very well in the coming time. With regards to MSL we see that some corporate actions are in the pipeline and we could see the stock price heading significantly higher from current prices too. As per some source based information some brokers who are close to the management have been aggressively buying in their own proprietary accounts and the same pattern has been observed in some HNI circle who is closely associated with the management of MSL. Although we do not believe in trading or investing based on such speculative information and we always believe to chase value stocks but still for short term perspective some traders can keep a close watch on the price volume and delivery behavior may be you could make some quick money out of them.
Gold Prices bounced back well from the lower support area of 1244 dollars and in the near term we have booked profits in Gold as we see massive strength in the dollar index. The value of the green back is expected to move higher in the coming days and the price action is suggesting a FED Rate hike in the offering. Keep in mind that if Dollar Index moves past 98.60 it is almost a given that a FED rate hike is coming in Nov 2016 and that will start a massive risk off globally and especially in the emerging markets basket. I hope people have benefited from our view on crude oil.
Good Trading To You!