SGX Nifty 5th Oct 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 5th Oct 2016

SGX Nifty / Nifty Futures today continued its pullback and closed in the green marginally. As per our overall analysis we could not understand what the MPC was trying to communicate.

Today Reserve Bank of India cut rates by 0.25 bps on the expectation that inflation will come in lower in the coming months. There are two parts to this first is to understand is that if we go back to Jan-Feb 2016 no economist was expecting CPI inflation to rise so sharply over the past 6 months which has rises as per reported data and no economist was also expecting that WPI inflation will rise consistently for 6 months which is also a reported data so I do not know which economist is going to go right on inflation coming in lower over the next few months till now RBI was taking into account only reported numbers and was not acting on expected or rather projected inflation rates but today we have seen a change in that stance, further comments on neutral rates were unthinkable, I personally cannot understand how come a developed market interest rate regime can be equated to emerging market space, it frankly defies all the book and theory of economics but yet since it has been mentioned we will try to figure that out at a later date.

As per our understanding inflation will remain high (the absolute numbers may come in a bit flattish due to higher base effects in the corresponding period of last year) but net inflation will not come down as per our understanding in fact there are many parts to this and we expect inflation to still move higher which will be lead by both agricultural commodities and also crude oil prices which we also see that now is not headed below 38 and on the higher side will move towards 60$/bbl.

Further we do not see a room for further rate cuts under best of circumstances for more than a 0.25 bps rate cut going forward even assuming that inflation will come in as per what Reserve Bank of India is expecting it to come so further there is not much room for monetary easing from current levels.  The major problem in the banking system is and remains lack of depositors at current interest rates and we do not think banks will be able to pass on much as the real savings ratio is declining at a alarming pace and this will not help banks to get depositors at lower rates than the ones now.

Nifty Futures as per our analysis we do not see sustaining higher but volatility will be there please keep that in mind and both sides sharp price movement will be seen as per our understanding. US markets as of now are trading a bit negative and we are still waiting for confirmation that we were seeking on Monday so will update more later or possibly tomorrow.   If you are trading only on the basis of this post please use appropriate risk management and trade. In the near term we could see both sides price fluctuations and some sharp declines and sharp pullbacks both will take place.

We remain very bullish on sugar space and on any sharp declines we continue to recommend buying ugar sugar and renuka sugar both these stocks will do very well in the coming time. Sugar prices are expected to firm up locally ahead of the festive season and we expect good results for ugar sugar and renuka sugar. There could be some positive news developments for renuka sugar in the coming few days traders do keep a watch on it. Crude oil futures we remain very bullish but keep in mind that it is also possible to see 43-41$/bbl so on sharp panics traders can accumulate crude oil futures. In the near term we see a resistance between 49-52$/bbl.

Good Trading To You!

68 thoughts on “SGX Nifty 5th Oct 2016

  1. Bull climb walls of worry most of people get worried about war n all market is not going to colaps all loss of expiry day covered with interest for nifty fall will come when everything looks good u may be right or not b
    By looking at chart it fill scary trend line becoming with negative slop for nifty
    Even for AXISbank n Tatamotors both give hint for future but fear of local people will support market market can be shorted with sl all time high but once all time high broken 20% rally is possible may b 50 %. With correction n consolidation

  2. Sir today gold n silver crash vertically.. Is it right time to buy physical Gold n silver for consumption (making ornaments) am very small investo..pls guide

  3. Commodity market started its fall and we were short on equity market. Silver falls more than 2000 points, gold falls approx 1000 points. Are we on right track?

  4. Dear Sir,

    I know that you are sure about the collapse and I believe in you.
    But, are you sure that the collapse will come within 2016?
    (A ‘yes’ or ‘No’ answer will be really helpful. Please do not reply ‘possible’. Or at least tell the chances as per your calculation, 80-20 or 50-50)

    1. you need to understand 2 things here. First my final target is at least 5875 and it does not matter if Nifty takes much time to come there. This year or next year as of now our shorts avg comes to near about 8470. We keep earning on stbt trades and carry fwd prem amt.

      1. Sir, but if target of 5800 if shifted to next year, don’t you think we will hit new highs or move towards much higher levels this year? This is because just crazy buying is seen at all levels that means if market delays to correct newer and newer highs may be a probability. Asking this just out of curiosity.


      2. Hi Glen,

        Just want to understand on above.So as per your wave counts,It seems impulse completed at 9119 and then ‘A’ wave was till 6825 and now ‘B’ wave ongoing which seems completed at 8968.Am I correct?

      3. Hi Mallav:

        You are expecting sub 6000, expressing trailing valuations of 15 times at current earnings.

        This obviously cannot be a mere technical call, there has to a shift in fundamentals to accommodate a PE compression of the magnitude you are talking of.

        While I have been reading your posts, you have touched upon oil, banking and inflation as possible triggers. I am not very convinced, it would be great if you could elaborate why a 16x multiple is justified.

        At the numbers you are talking about MCap to GDP will be feverishly cheap along with alternate valuation parameters such as CAPE and PB.

        You can never say never, but it would be great to get your view from an intellectual process.

        1. my primary analysis is based on wave, time cycles and astro cycles. Valuation and fundamentals are add on to that system

  5. Sir I know you give paid service but still I want to know what bottom you r predicting for Renuka and Bajaj and sir what upside you predicting for both the above if your valuable advice help for mental satisfaction sir after all this market it can go either side but if you provide your valuable suggestion about bottom and high on above both stock I will be very thankfull

  6. Market in red even after rate cut..

    Everyone was yelling tommorow market will boom …bank nifty will boom ..but nothing happened US marker continue to be in red.. GOOD GOING SIR

  7. Jp morgan emminent stock advisor and with highly qualified staff predicting 2017 nifty targate at 10000 and Glen sir predicting the same targate 5875. Let us see who wins. My inclination towards Jp which looks very obvious

  8. Sir,
    Have you started adding advertisements to this forum? If yes that really a very good move. I was planning to suggest the same before few days itself. Nice move and congrats, to get advertisement definately is challenging thing.


  9. Sirji, as I had written yesterday nifty reversed after touching SAR and did not break the falling window of last week. The next possible target for nifty on the downside may be SAR point of 8555.2. Let’s see. Also today igl,havell & TVs corrected giving approx 6000 perlot. TVs tgt on upper side 400 thi 420 & on lower side 335. IOC short term shorting area 625 for tgt 598 and overall 668 to 672 tgt, Idea tgt 55 & bhartiairtel 235 hero moto 2850 bajaj 2500 TVs worst case 235, ceat overheated tgt on upside 1440 thi 1502.75 & on lower side 1241.50 if it breaks Monday low of 1339, hindzinc good buying area 235 thi 240 for tgt 280 thi 301. These are the charts I studied for E W and I may be wrong. Sirji, coal India chart suggests upside till SAR. Sir, I hope you don’t mind if I share my humble views on your blogsite.

  10. looks like market not willing to give up so easily.Always bounce from low levels. The market is beating technicals and astrologers in every way. Its time to play in and out for some time. Positional holding is not giving any fruitful results.

    And since Diwali is on the corner expect some fireworks more.

  11. Respected sir my question is very simple I want to know what is bottom can be precdicated for Renuka sugar and bajaj hindustan and what is upside predicated for Renuka sugar and bajaj hindustan can you give your valuable suggestion for this both stock I will be very thankfull sir

  12. Sir,
    On 29 Feb 2016, Low made was 6825.
    On daily chart of Nifty :
    On 10 Mar 2016, 10 SMA line crossed 30 EMA upside and was intact till today.
    Today, 6th Oct, 2016, 10 SMA line crossed 30 EMA downside for the 1st time.
    Do u see any possibility where Nifty will may cross 8968 and will make a new high for this corrective wave?
    If yes, then in this volatility, do u see “all time high” coming up ?
    Please guide sir.

  13. nifty is going silver join the same race.all your calculation +astrology+niftyPE going wrong.plz think over .

    1. FYI in the past 2 weeks we are plus in Nifty by 180 odd points. I will keep taking tactical trades from time to time. Silver we bought at 33K onwards till 40K and then we booked at 48K. Then we have initiated buy now at 43K onwards where we have only deployed 50% qty till now. Your statements are utterly baseless so please check them before you blame/allege.

    1. w r t silver Sir please understand the following clearly

      1) We bought silver at 32K onwards til 40K and booked at 48-47K
      2) We have now initiated staggered buying again.

      Please read carefully

  14. Sir,
    The fall from 8770 odd levels to 8700 odd levels has been extremely sluggish and now in fact post US jobs data the US markets are seen positive. Do you still think markets will correct sharply in recent time range. You had mentioned about amplification of trend (considering it as down) from 5th Oct as per astro.


      1. Thanks for reply. There have been other time cycle analysts Sandy Jadeja and Bo Polony as well who had timed 22 sep 2016 as a major top for this year and have been expecting a sharp downside post this date. But stock markets literally are playing with all type of analysis this time, even though one has to agree that the top created before 22 sep 2016 is still safe indicating the trend is down. But one thing looks very clear, markets not willing to give up easily. Markets infact popping up on each bad news as it expects fed will delay hike die to this.


  15. US created 156,000 jobs in Sept v/s 176,000 jobs expected
    Nonfarm payrolls increased 156,000 for the month and the unemployment rate ticked up to 5 percent, according to figures the Bureau of Labor Statistics released Friday. Economists surveyed by Reuters had expected 176,000 new jobs and the jobless rate to hold at 4.9 percent.

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