Incisive Nifty Trend Analysis

[Bigbear]

You Nailed in Relish,

If you study the past big bull markets and the way they have started,
A good general indication is that a good deal of stocks (From many sectors) will start hitting 52 week high and move beyond it BEFORE Nifty hits new highs. I dont see that happening.

If you just look at Nifty Index, you will not know whats happening behind the scenes.
The current market Leaders from IT sector and pharma sector is not only being added to Nifty , their weight age in Nifty is increasing in these sectors: For Example, The current weightage of TCS in Nifty is a whopping 10%.
So Basically , Around 16-17 Stocks of Nifty have a massive weight age of 70%.

So on the probability side, a motherbull market occuring is a low probability event.
On the other hand, i am not telling that markets wont touch new highs, it might, it might not.

By the way, have you guys seen a negative divergence between Nifty and banknifty on Daily Charts, I personally thing , there is an opportunity there, waiting to be exploited.


Ultimately, whatever be the long term view, being with the flow of the market is the right way to Trade . But make sure to increase your position size, when trend turns in the direction of your long term view :thumb:

By the way, Relish, Based on what studies do you say that the buying capacity of the consumer is going down?

 

[Relish]

By the way, Relish, Based on what studies do you say that the buying capacity of the consumer is going down?

Sorry I forget to mention.

It is only my analysis based on friend's salary increased and how much they r spending now days. Food inflation whatever but it is hurting people more than previous 60-90 RS KG onion. Rest when festival data comes will shows better since most indian people spend heavy this season.

95% people earning less than 6 lac as per zee news

 

[prada]

Nice to see the retail pessimism persisting in the market. This is the text book definition for the emergence of a bull market. More and more of this, will only lead to panic frenzy buying at a later stage. Dips will come and go but will have smart money pouring in their money at every lower level. It is a myth that lower interest rates= Higher market levels. Going back in history one will realize that the market always moves in the direction of the interest rate with knee jerk reactions. I am yet to call this a bull market, but certainly has every sign of one. If one is abstaining from entering the market because of inter market divergence, all I can say is that catch up will happen but when it happens it will be very sharp. Let me sign off with an old saying "In stock market, Future action/news is always discounted at the present".

 

[sridhar]

Nice to see the retail pessimism persisting in the market. This is the text book definition for the emergence of a bull market. More and more of this, will only lead to panic frenzy buying at a later stage. Dips will come and go but will have smart money pouring in their money at every lower level. It is a myth that lower interest rates= Higher market levels. Going back in history one will realize that the market always moves in the direction of the interest rate with knee jerk reactions. I am yet to call this a bull market, but certainly has every sign of one. If one is abstaining from entering the market because of inter market divergence, all I can say is that catch up will happen but when it happens it will be very sharp. Let me sign off with an old saying "In stock market, Future action/news is always discounted at the present".

If one takes the highs of 2007 & 2011 and adds a factor for inflation then the Nifty should trade at around 9000, or lowest 7500, to say that it is a life time high. Now this means that a majority of stocks are in the pits & investors with a 3-5 year time frame should start accumulating. Those FIIs who are in for the long term are doing exactly that. Not to mention that the sudden rupee weakening to 60-67 levels gave them more shares for their dollar than they had originally factored. One more reason why they are buying now would be the belief that the rupee will not strengthen much from here on.

Also historically the markets surge before general elections. And the increasing probability that the UPA-2 will be voted out seems to help in the build up. But the underlying structural problems have not vanished and so F&O trading should be done with strict eye on short term trend.

I have been seeing that the market is moving up or down in blocks of 200-250 points & this has to be kept in mind to ensure profits are booked in a timely manner.

 

[prada]

Nifty update: Having tested 6200 in the week gone by, bulls seem to be in a raging mood and wanting to drink more of bear's blood. Bullish Sentiment too has started to gather more momentum. I've been maintaining an extremely bullish stance ever since Nifty tested 5700 and closed above 5730 on a daily closing basis. If my time tested, time series analysis is to be believed , then we are looking at 7150 by January 3rd 2014. Major multi-month bull market is about to unfold once 6338 is taken out. Buy on every dip and positional traders can now move their stoploss to 6040 on closing basis. Lets see how this pans out.

PraDa

 

[timepass]

Nifty update: Having tested 6200 in the week gone by, bulls seem to be in a raging mood and wanting to drink more of bear's blood. Bullish Sentiment too has started to gather more momentum. I've been maintaining an extremely bullish stance ever since Nifty tested 5700 and closed above 5730 on a daily closing basis. If my time tested, time series analysis is to be believed , then we are looking at 7150 by January 3rd 2014. Major multi-month bull market is about to unfold once 6338 is taken out. Buy on every dip and positional traders can now move their stoploss to 6040 on closing basis. Lets see how this pans out.

PraDa

What's your take on USDINR now ?? It's been trading below 62 for a while now.

 

[prada]

Still maintain the same stance on USD/INR. Its in a corrective mode. Bounces will be sold into.

Market Update:

Nifty: After the stellar run seen over the past one month, we are at an important inflection point. At the moment, the bounce back seen, atleast to me looks impulsive in nature and certainly does not look like an ordinary short covering rally. If my reading on the market is correct, then a test of the recent high as well as the life time high is on the cards(cheerful times in dalal street) and this should be seen within the next couple of months. Will analyse and update as the move plays out since the upcoming move is going to be quite tricky. The move so far has been extremely polarized and going forward I expect broader market to start participating in the rally. Bears need to start exercising extreme caution in shorting the market. It looks like market has started discounting some good news on the economic front. Extremely interestingly poised.

USD/INR- Seems to be stuck in a tight range and in a corrective mode. Best to be left alone until the correction plays out. 58.5 cannot be ruled out in this correction, with strong support seen at 60.75.

Global markets: Most of the markets seem to be trending on the upside. With the US markets having corrected the recent upmove, I expect it to resume its run again with DJIA targeting 16k+. European markets are in a strong uptrend, with select Asian markets participating in the rally.

Picture seems to be quite good and conducive as of now for Dalal street to finally join the party. Lets see what the market has in store.....

PraDa

 

[bigbullinside]

Nifty update: Having tested 6200 in the week gone by, bulls seem to be in a raging mood and wanting to drink more of bear's blood. Bullish Sentiment too has started to gather more momentum. I've been maintaining an extremely bullish stance ever since Nifty tested 5700 and closed above 5730 on a daily closing basis. If my time tested, time series analysis is to be believed , then we are looking at 7150 by January 3rd 2014. Major multi-month bull market is about to unfold once 6338 is taken out. Buy on every dip and positional traders can now move their stoploss to 6040 on closing basis. Lets see how this pans out.

PraDa

PRADA!!!
My god, man......spelling out a target of 1000 points within 3 months, really takes some guts.
I too am bullish on the markets......particularly CNX 500 stocks (the small caps). According to me, they will give a major move in the years 2014-2016. I have put in all of my savings for the upcoming bull market. I am a portfolio based trader (meaning I buy 10 relatively strong stocks and hold on, till the conditions satisfy me holding them). And right now I am pretty confident that they will give me pretty good returns over the 3 years.
I don't trade the indices that much. But I have been following you.......
So, if you see Nifty at 7000+ levels by January, where do you see the Bank Nifty going? I know you said that it will start participating in the rally, but would be nice if you could give us a level.
Cheers!

 

[bearishbull]

Nifty update: Having tested 6200 in the week gone by, bulls seem to be in a raging mood and wanting to drink more of bear's blood. Bullish Sentiment too has started to gather more momentum. I've been maintaining an extremely bullish stance ever since Nifty tested 5700 and closed above 5730 on a daily closing basis. If my time tested, time series analysis is to be believed , then we are looking at 7150 by January 3rd 2014. Major multi-month bull market is about to unfold once 6338 is taken out. Buy on every dip and positional traders can now move their stoploss to 6040 on closing basis. Lets see how this pans out.

PraDa

What's your take of possible repo rate increase by RBI on the 29th? If that happens, the bulls will take a good beating.

 

[timepass]

What's your take of possible repo rate increase by RBI on the 29th? If that happens, the bulls will take a good beating.

and what if the rate increase doesn't happen ?? Anyway, Ranga said some time ago that he won't wait for the policy review dates to announce the changes in the rates, if any. Will announce whenever necessary.