Several factors prompt out and signal the eventual fall awaiting the market. Lets analyse them and make some sense out of it all.
- The overall sentiment prevailing in the market is positive. Its quite easy to recall the overall market sentiment before the 2008 fall where people where absurdly optimistic and unrealistic. Even though people are cautious presently yet no one is particularly bearish with most of them being clueless.
- As per long term elliott counting, we seem to be in wave 5 with the same sectors seeing a rally with more volumes indicating that we are yet in the previous bull market. IF NIFTY FAILS TO CROSS the previous high of 6357 in the coming time then we will in most probability witness a breakdown.
- The 'Election Gap' made at 3800 is yet to be filled. Anyone believing in the Gap Theory ought to expect the nifty to correct atleast to sub 3000 levels, which in itself is a big fall from the current levels.
- During the global lows in 2008 we had the govt heavily infusing money in the markets when even the roadside dog was bearish. Result? nifty rockets from 2500 to 6000+. In the current scenario, we have the govt selling its stake in every second psu on the pretext of reducing our ballooning fiscal deficit. Its anyone's guess to predict where nifty might land if the reversal holds true.
- The div yield to P/b ratio before the dramatic 2008 fall had reached a peak of almost 1:6 ratio. The current ratio is hovering close to those levels. So, clearly a correction is largely due.
The final call??? SHORT nifty with sl of 6390 for Target1 of 3800.
Risk= 240 points. Reward= 2400 points.
makes sense!but is'nt there the slightest chance of nifty crossing the previous high?
ReplyDeleteCrossing the previous highs takes us to 7k+.
ReplyDeletetoo late for that now..
@deepti
ReplyDeleteMarkets are forever unpredictable. There's always a chance on the other side. Hence, the stop loss.
@niftynikhil
its never too late for anything in the market. The obvious is never so obvious. nifty has not yet crossed the previous high of 6357. so technically there's still a possibility open that a lower high has already been formed.
blog made for panic
ReplyDelete@sandeep dhawan,
ReplyDeletei have put forth my views 'as is' in the most honest way possible. people often are reluctant to look at the other side. markets are ever suprising. it would be prudent to keep both our eyes on the horizon and not ignore the other side. Read Between The Lines. And things will start becoming more clearer.