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SGX Nifty 22nd April 2016
SGX Nifty / Nifty Futures today once again opened higher and took resistance exactly at 7980-7972 area. Regular readers and clients of this website may recall that since past few trading days we have been saying that Nifty resistance at 7980 spot Nifty levels mentioned. As per our Nifty Futures Tips / Nifty Prediction we once again reiterate that these are not prices to buy on dips or buy at current prices rather these are best prices to exit from your portfolio and even short selling Nifty Futures is advised. We have recommended to our clients to short sell and we are now holding positional shorts in Nifty Futures and we also have some shorts in Nifty May calls. The combination of Elliot wave studies, Gann Wave studies, Time cycles and astro cycles all put together are showing us that Nifty can begin sharp correction anytime and we do not see Nifty Futures sustaining on the higher side. Also if we take a look at the overall Global stock market charts and Nifty Charts there are two very clear danger signs that have emerged over the past two trading days. First one is that all of the Global Stock Market indices are now at over bought territory which includes the American Indices like Dow Jones and S&P500 hence in the near term their upsides will remain capped and hence we are seeing a sharp correction lead by these Global indexes and that does not mean that Indian Stock Markets will remain insulated from the fall the Global Indices are about to witness since this largely has been a Global Stock Market rally and eventually has turned out to be a “Bina kaarann Tezi” hence what is happening on the Global Stock markets scene has to be kept in mind. Also another indicator that shows us the Global picture is VIX (Volatility index ) and VIX has broken the previous low of 14 and made a low of 13.98 which in simple words means that it is suggesting a extremely complacent environment (The VIX is indicating that Global Headwinds are out of the way, all issues pertaining to growth have been addressed and even the so called China problem has been taken care of but in reality nothing has changed). Let is take a closer look at the VIX index for reference. For e.g. if we take a historical correlation when Nifty was at 9100 at that juncture VIX was at 14 levels and now today VIX has broken 14 which means that the world stock markets are very complacent and whenever such scenario has taken place in the past (back tested results of over past 15 years ) shows us that there has always without fail been a major top in all global stock markets. So a VIX indicator shows extreme complacency, daily and weekly readings of the momentum indicators show us a over bought reading, Trailing Price to Earnings ratio goes to almost 22 (at 9000 we were at 23.11), Just two trading days back there were three level 1 geocosmic signatures which have a trend reversal capability over past historical testing of over 89 percent individually and when they have taken place back to back there has been a correlation of a top by 95 percent plus times. All of these readings and there are multiple other indicators both on the Global Stock Markets front and the Indian Stock markets front that Nifty Futures is almost at the top.
In addition to these indicators we have the sentiment indicators which also are clearly showing us a top out area. The situation as of now is exactly the inverse of that of last week of Feb 2016 at that juncture everyone was bearish and now everyone is bullish. That time everyone was justifying 6500 and now all of the people are justifying 8400. Keep in mind that this is the exact situation that we had predicted long back in Feb and the Rahu signatures are all over the complacency indicators.
Nifty spot resistance for tomorrow is at 7980 and support is at 7710. Buy MSL, Tata Coffee, Renuka Sugar, Eid Parry, Bajaj Hindustan, NMDC, Kesoram on dips.
Good Trading To You!