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SGX Nifty 27th 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. PLEASE DO NOT OVER TRADE.
Sgx Nifty / Nifty Futures today broke down after the Brexit verdict. Many traders and investors were actually looking at the trigger and were expecting a bullish move towards 8500 but as we all know now none of that happened on the contrary Nifty broke down did take out key levels on the way down there by once again confirming our overall wave counts and reiterating our astro cycle analysis. Yesterday post market we had clearly mentioned to our clients that post g wave failure the next move will be with speed and we can take out some major levels on the downside during this move. Most analyst and brokers are still advocating a buy on dips strategy but we do not feel that is the right thing to do. Regular readers and clients of this website may recall that when Nifty was at 7000 levels we had clearly mentioned that 8250 around Nifty will make its top for this round and then only will a down move will come.
As things stand right now we are very clear that no buying must be done at all. On dips buying as of now is not the right thing to do as per our analysis and as per our Nifty Prediction / Nifty Futures tips given to our clients we are very clear that we have just started the down move. As per Neo wave if the previous move is retraced in lesser time then consider a new trend has started as we all know that the previous wave speed (speed on the upside) was lesser than the speed of today’s fall and we are clear that a new down move has started and we will see significantly lower levels from here on also. Some people called me and said that since India is the bright spot in the Global economy we will out perform and I do not see India as a bright spot in the Global economy. There are multiple factors for that view. Inflation is on the rise for the past 3 months in a row and the next month inflation could be slightly lower or flattish because of a base effect but that does not make things cheaper. Exports are falling for 17 months in a row now, INR is become unstable post today’s move and could very easily move towards 70, oil import bill is almost double of that since the early part of this year. Govt locally is stuck with the GST bill and have not been able to take everyone yet on board to pass the bill. We further see that as per our astro cycle agri commodties will move higher there by further leading to food and services related higher inflation. Fed about to raise rates in the coming months and the latest instability in Euro zone. All this is not a factor conducive to risk on assets. Further we see the most important part is that the valuations where we are. Even today we are at 22.50 trailing earnings and almost 19.5 times fwd earnings now that is not cheap and as we have said that no one has made money buying at such rates and we do not think this time too it will be any different. No investor will make money buying fresh here unless it is in a deep value stock like Maharashtra Scooters Ltd.
The wave counts show us that in the coming time a major down cycle will come so please be careful and do not buy or deploy fresh capital in a hurry. The implications of brexit is huge and this will in turn trigger a massive global risk off and that could take a few more days. In the near term expect some people to come and say the event is now in the price etc and start buying value stocks but we do not see that playing out. Astro cycle show us that what has happened today is just a sign that we are on the right track. The real implications of today’s verdict will be seen shortly in the coming time.
Use all dips to buy and hold Renuka sugar, Eid Parry, Bajaj Hindustan, Ugar sugar, Msl, Tata Coffee. All these stocks will do very well in the coming time. Mars goes direct in the next few days and expect that to add power to what we have seen today. Many people will say look at the pullback which has come from lower levels and say that its a buy on dips but in the next few days lot more shocks will come. Pullbacks will come and go but overall we do not see Nifty sustaining on pullbacks please keep that in mind.
Good Trading To You!