Nifty Today’s Trend, Prediction, View, Target 3rd Jan
Nifty today’s trend was bearish and perfectly in line with my view, prediction and is now heading for lower targets. Regular readers of my website are well aware that we have been advising to get on to as much cash as possible on the portfolio front as well as sell calls as we see Nifty is in a down trend and is heading for lower targets, I am not saying that the fall will be one sided well it could end up being a one sided fall but the point that I am trying to convey is that the multitude of negative factors historically have never been able to deliver good positive returns for equities so when we have a combination of negative events and news flow and also the best of the tail winds behind us we are not in the camp which feels that markets are heading higher in the short term.
Let us look at the entire picture carefully. Nifty first topped out at 11760 (we were very bearish at that point in time and were predicting significantly lower targets ) now the fall from 11760 took us to around 10000 levels (at 10000 levels Nifty had completed its first round of decline) and hence we were recommending buying around 10000 levels where we did buy some stocks, Bank Nifty, Nifty Futures all of which gave us excellent returns, our targets from around levels of 10000 were 10850-11050 and that target was done now that we have completed the pullback for the fall of 11760-10000 now we are once again going to resume the down move. I am not saying or predicting that Nifty will break 10000 level for the time being that we will review and keep updating the targets to our clients but for the time being we do not see a possibility that buying will make much or rather any money from current levels. Please keep in mind when I am saying that buying will not make any money I mean the broader stock market and the broader portfolios not one single counter or stock so coming back to the point we see lower targets from here and hence investors should look to be on as much cash as possible for the time being. From a traders perspective the markets, Nifty and Bank Nifty are in a down trend sure pullbacks will keep coming but those pullbacks will end up as lower tops so if we take a look at the market or major indices from a longer time frame it will end up as lower tops and till we do not see a higher top higher bottom formation on larger swing it will be prudent to just sell on rise for lower targets. We say this once again the best of the tail winds (lower rupee, lower bond yields and lower crude oil prices) is priced in and these tail winds will now start acting as headwinds. I am not saying everything will turn tomorrow morning but one by one we will start seeing crude reverse, the rupee and then bond yields to add to this we have global markets in a down trend and also elections coming up and the fiscal deficit problem all these do not argue well for equity returns.
Rupee today started a sharp recovery as we have predicted USDINR pair was a short sell around 74 for lower targets of around 70 and that is done now we once again are of the view that we see higher targets in rupee and we will not be surprised to see rupee around 75 levels soon. As usual if you are only trading on the basis of this post please use your own risk management and trade please always keep your risk in check and please do not over trade.
Good Trading To You!