Nifty and market analysis
Nifty, a benchmark is trading around at the lifetime high and no one is expecting any downside from this level. This is not a good signal, after all, it’s a market. Nifty is getting managed just because of some couple of stocks like HDFC, HDFC Bank, Reliance, TCS, INFY, Maruti as all these have maximum weightage in Index. All these 6 stocks are at or close to the lifetime high and dragging index up. But the problem is MidCap and SmallCap are at 52 week low levels. As I am monitoring some concerns relate to nifty as mention below:
1:- Fundamental View (Nifty PE and Its historical PE): It’s close to 28 and history says it’s an alarming level as the fundamental point of concern. The idea range of NIFTY PE is detailed in this good informative link.
Click of watch Nifty historical details. Click Here
2:- Technical View: In Nifty and market analysis, Nifty started its up move from the level of 9950 and today its 11150. It’s approx. 1200 points move close to 12 % just in 4 months. During this up move, nifty so many technical gaps and they are still live. So technically nifty is very close to double top level at lifetime high levels.
3:- Currency View: – If you have a look at currency INR vs Doller then it’s hovering around lifetime low level 69.125 – 68.662 it’s also not a good signal as macroeconomic levels
4: Crude: it’s also moving around 74-68 $ per barrel, not good for emerging market and developing countries.
5: General Election: As we all knows that in May 2019m we have the general election; Loksabha election 2019. The market doesn’t like uncertainty so we have to be cautious at this point in time.
6: Trade deficit: India’s trade deficit almost doubled in 2017-18 from the previous fiscal as the country’s import bill continued to inflate.
The gap between exports and imports, widened 28.5 percent from a year ago to $13.7 billion in the month of March, taking the annual deficit to $87.2 billion, according to data released by the commerce ministry today. The deficit was at $47.7 billion in the year ended March 2017.
Imports in March rose 7.2 percent to $42.8 billion. For the full fiscal, imports rose nearly 20 percent to $459.6 billion. Petroleum and crude oil imports continued to be the largest contributor to India’s import bill with an increase in shipments of electronic goods and machinery as well. Brent crude oil prices have risen to $67 a barrel this year from nearly $46 a barrel in June last year. Gold imports declined for the third straight month, while pearls and jewellery imports moderated.
Conclusion: As per my Nifty and market analysis it’s not the right time to go long (Buy nifty), Risk reward is not in favour. Sell Nifty with a proper hedging strategy. For knowing about all this, you can join us. For knowing about trading strategies, contact us.