Market View: 7-11 SEP 2015

Filed in Market Update by on September 7, 2015 0 Comments
Week Market View: 7-11 SEP 2015
Market This Week Last week the Nifty closed at 7655 registering a loss of 4.3% over last week (not repeating the reasons for the fall again). The bottom-line is that the bears are in full control of the markets. It is clear that NIFTY has entered into a downtrend from the 5 month consolidation range of 7900-8650. If we see the historical NIFTY chart, it has always corrected approximately 45-55% from the tops it has made after a massive upward rally. If we look at our rally, it started from 6000 in early 2014 to 9000 in early 2015 (A good 50% upward move). Today it is at 7600 levels. It could be said that we could witness a 45-55% correction (from the top) from now onwards. Our revised supports for NIFTY would be 7500 (immediate) and 7000 in the longer run. All the investors should revisit their portfolios, hold on to good counters and exit loss making ones. If the exit strategy tells you to exit, please go ahead and sell, else the counters will bleed further. Do not allow profits to get converted to losses. Before a profit making counter starts getting into losses, exit. That’s the strategy in the short term. All said and done, does it mean that our bull run is over? The answer is a big ‘No’. Historically whenever NIFTY corrects 45-50% in a bull run, it rises back sharply and has the potential to triple from the bottom level. That’s what historically it has done. We can expect the same this time around too. India is likely to grow at an estimated 7%. Our fundamentals are strong and our reforms are on track. The whole world is bullish on India and we are a performing market. The current correction does not change our fundamentals, the fall has been triggered mainly due to the ongoing global turmoil. The winds will change anytime and we should be on track again. Our bull rally is still intact and the correction we are witnessing now is nothing different from our earlier bull rallies. From now on, let’s approach the markets one week at a time rather than speculating on the bottom out level. It is a good time to revisit our portfolio and sit on cash instead of averaging. There will be a lot of opportunities once the uptrend starts again. The NIFTY could swing again anytime and massive profits will be made during the swing. There is no point entering the rally in the final phase of the bull rally when everybody on the streets start taking positions. The real time to enter the markets would be approaching anytime and there would be a lot of opportunities dropping in. A portfolio created then would be the one to watch out for. Let’s have a patient and cautious approach till then. All the best!

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