Nifty trend today / Nifty prediction today 27th March 19
Nifty trend today was bullish and there was a sharp surge towards the second half of the trading day. Our sentiment indicators have now touched euphoria levels everyone in the market is talking about levels of 12100-12500 and the one common reason for the bullishness is a stable Govt coming back to power lead by BJP getting absolute majority in the coming elections so based on the sentiment readings everyone is bullish and everyone is bullish for the same reason so this historically has been a dangerous signal so keep in mind to be very alert and watch if the Nifty or for that matter the broader markets also reverse sharply. Having said that keep in mind that there could still be some more upside remaining and although that upside can come we do not see how that upside will sustain and there are many reasons for that which we have explained in our previous updates also. Based on my Nifty trend / Nifty prediction we do not see any major upside sustaining though there could be some minor upside remaining however there are too many factors at play which do not support equity returns.
Coming back to today’s move there are many people who are thinking that we have resumed a fresh bullish move well that could be one possibility which I am not denying but when we look at multiple parameters we do not see based on historical parameters how the markets will sustain any upside that comes. (once again we are saying there could be some more upside and please do not confuse that with bullish move) the majority of the factors including the price charts are getting dangerous by the day and when we are in such a scenario it is very clear that Nifty and the broader markets have never sustained on the higher side. Let us take one of the e.g. of PE whenever the PE has been above 27 Nifty has never sustained above 27 for longer duration of time and eventually Nifty has always reverted back to the mean PE of 14-15 or in most cases lower than that level also so if we look at the market is currently trading almost at 28.20+ so from a historical perspective Nifty has never sustained higher. Take another leading indicator and that’s the astrological and time cycle system. In the past 100 years we have had planet x transiting through some x sign and 95% of the time whenever this has happened we always have seen a recession follow. The last time this occurred was in 2007 so the markets at that point in time was rallying higher and moved to make a top and then started a major decline the same trend is observed in all the cases that we have examined over the past 100 years we do not see why it will be any different this time also. In addition to these factors we had the yield curve get inverted in USA which once again is a dangerous signal for the markets but one factor is above all and that is earnings and earnings have been missing from the market for way too long and valuations remain extremely stretched so in such an environment we don’t see broader stock market returns sure there could be some more upside in the Nifty and I am not suggesting for even one minute that that’s not possible sure we could see some more upside but we do not see that upside move sustaining and eventually we see Nifty moving lower. The question remains how much lower but we will keep that discussion for some other day.
As usual, 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. The current astrological set up is perfect for false breakouts so keep that in mind and trade. Do not go by one single day moves and look at the overall picture before trading. While my overall view is clear that broader stock market will not give much returns from current levels there are some select stocks that will give good returns regardless of what the Nifty does and it will be prudent to keep accumulating them on declines.
Good trading to you!