Nifty trend today / Nifty prediction today 26th March 19
Nifty trend today was bearish and although we did see some consolidation during the trading day however the trend was clearly lower for the day but what remains to be seen is that is this a pullback trend of the current up move that has been going on or is this a larger trend reversal and the pullback that started from 10000 levels has that ended that remains to be seen. As things stand as of now Nifty trend is moving perfectly as per our Nifty Prediction given to our clients and based on the overall scenario we have advised our clients to reduce portfolio longs as Nifty moves higher. We know that there are many traders who are playing for the upside based on the election outcome but the point is that regardless of who comes to power the overall scenario does not look favorable for equity returns broadly speaking (there will be some select stocks that will still give good returns but not the broad market) and we say this because of multiple factors that are at play some of which we have discussed in our previous updates and some we have even discussed here today.
Let us once again take a look at all the factors which are at play as of now. Over the past few days, we have discussed valuations which are very high from a Nifty 50 perspective and we know that Nifty has always given deep cuts from such hefty valuations. In addition to the valuations, we also have discussed some other factors so those who have not gone through our previous articles can read them.
Now, today we will look at some more factors that are indicating that the road ahead may not be that great for equity investments so firstly on Friday during the US market hours we did see an inverted yield curve in the bond markets for the first time since 2007 so what is this? For the benefit of the readers this is when the longer term rates fall below short term rates and this historically has ended up in a sharp recession in the USA and across the globe so this is a fresh indicator that has triggered in the USA on Friday and keep in mind that this is another high probability signal that the markets are telling us. In addition to the inverted yield curve there are some very similar astrological alignments also that exactly is resembling late 2007 so if we take a planet x was at y sign at – degrees, when this inverted curve took place in 2007 and even now the coincidence, is that that planet is at the same place as it was in 2007 and the yield curve has become inverted so does that mean that we are going to follow a 2008 like recession well as of now the way the slow down is playing out it is surely looking a lot more worse than 2008 scenario but we will need much more confirmation for that. The bottom line is that historically whenever this planet has transited this degree there always has been a recession without any exception till date so I am not suggesting that it cant be different this time sure it can because there are multiple combinations that are possible however there is a high probability scenario that we could end up in a recession so keeping that in mind while planning your investments will be a good thing however follow the trend and move in line with the trend. Keep all these signals like high valuations, low earnings growth, inverted yield curve, astrological and time cycles in mind however trade based on the trend and plan your investment and trades on the basis of the trend.
If you are only trading on the basis of this post please use your own risk management and then only trade please do not over trade and always keep your risk in check before trading.
Good trading to you!