SGX Nifty 2nd Aug 2016

SGX Nifty

LTP  8,576.00   -128.00   -1.49% High 8,710.00 Low 8,546.50

SGX Nifty

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SGX Nifty 2nd 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 opened higher today following positive global cues.  After making a high of 8711 spot Nifty levels Nifty started fast move down and made a low of 8590 but finally recovered to close the day flat at 8636. As per our Indian Stock Market analysis we reiterate the bear market that started on 4th March 2015 resuming and we once again are saying that the down side levels for this move is not even being imagined by anyone today in the market.  Those people who want to study this from a academic point of view please see cycles of 1929 and 2007.  There are exact replicas almost completed in the cycles and if we see those cycles we are very clear that history will repeat itself and if history repeats itself then world stock markets and all risk on assets will collapse. We do not see much time remaining for that now.  So please be careful.  There has been a lot of effort by central banks of the world to push cheap money into the system and continue the rally but the world has now realized that economic growth is very tepid and with the hand over of control by rahu shortly the next planet  who will control the rally will start putting a reality check in place, further it will make everyone accountable also for the froth that has been formed as of now. We did do some trading and were able to gain 50+ points in intraday trade. We will keep trading in order to push our cost higher.

Part of today’s chat transcript is enclosed below

[10:05 AM, 8/1/2016] +91 90040 79145: Msl mallavvv
[11:01 AM, 8/1/2016] +91 90040 79145: STBT Nifty Sell @ CMP SL 8728 Spot
[11:01 AM, 8/1/2016] +91 90040 79145: confirmation stbt trade active
[11:52 AM, 8/1/2016] +91 90040 79145: Hold positions as told
[12:02 PM, 8/1/2016] +91 90040 79145: STBT Trade Book 50% Profit
[12:02 PM, 8/1/2016] +91 90040 79145: confirmation stbt trade booked 50% profit
[12:03 PM, 8/1/2016] +91 90040 79145: Hold rem 50% stbt trade qty till next update
[12:21 PM, 8/1/2016] +91 90040 79145: Hold rem 50% stbt trade qty till next update
[12:33 PM, 8/1/2016] +91 90040 79145: STBT Trade Book rem 50% qty @ cmp
[12:33 PM, 8/1/2016] +91 90040 79145: confirmation stbt trade booked

There has been a lot of talk about how GST will take care of the Indian economy but we do not see the present GST being of much use or rather it will not be a game changer. With majority of the revenue products like alcohol, petroleum being kept out of the ambit of present GST it will not serve the purpose. Also when we have studied the GST bill in present form there must be a capping if there is no capping then it could very well end up being like the present service tax 10% then 12% then education cess 2% then swach bharat cess and now kalyan cess. We are now paying 15% which was originally designed to be at 10% a whooping 50% more.  Imagine if this happens with GST. It will create havoc for most service based industries.

On Nifty charts there are series of negative divergences which are clearly present and we do not expect such divergences to persist.  In addition to the divergences we see multiple other time tested indicators showing dangerous signs.  So extreme caution is advised as the pullback rally that started from 6825 is now in matured stage.

Good Trading To You!