Nifty near all time highs!!! Where is the Nifty headed from here on?


12th Sept 2016

This write up is in continuation to the last update in 2015 where I had said that the Markets are just in the correction stage and not a bear phase. This prediction came out to be true. Infact the 20 stocks that we recommended (specially for Members) at the bottom of this correction have given tremendous returns.

Now that the Nifty has once again tested the all time highs there is a lot of fear as well as enthusiasm in the markets. The view on the market is divided. Hence it makes sense to intervene and give my view on the markets from here on.

To understand if the market positioning and for investors who have a left out feeling we need to understand how the markets behave in every bull market. This is the psychology of investors and traders which is very important to understand. As can be seen below the “Market Curves” figure has been respecting world over for many decades. This is how the Nifty of the BSE Sensex behaved in the last bull rally from 2003 to 2008.

 

Now the figure below will explain you where the Markets have positioned themselves as of September 2016.

 

The above figure is self explanatory. Not much is what I need to write about. But some reasons that support the above chart are very important.

  1. The next year’s budget session is preponed. This will be the first trigger as the budget nears.
  2. The GST will be implemented very soon. The effect will be seen in the year after. However the intelligent investors will anticipate and buy now. Not when the GDP numbers start soaring.
  3. World over we see a lot of problems. The latest - The German exports fell sharply in July, shrinking the overall trade surplus for the fourth consecutive month - something not seen since 1992 in the euro zone's largest economy. This is indeed a positive for our economy since India will be one of the few countries which will register growth where as the world will be in deep problems.
  4. This will in turn have India upgraded. This higher rerating will bring in a lot of FII investments. Money from all over the world will flow where growth is - Financial Law of attraction.
  5. On the local front we have received decent rains. Now the inflation will see a down tick which will ensure the interest rates are reduced in the months to come.
  6. The present government at the centre has prepared its groundwork in the first 2.5 years of ruling. The Next half will actually see the delivery to the eyes of the common public. This time the leadership is dynamic with a great vision.

Finally money is made by those who have the vision to see the future.  

 Here I strongly believe that we are at the end of the second phase called as “Awareness Phase” and the “Mania Phase” is not very far away which will be an opportunity for all investors to mint a lot of money. For all those investors who feel that the markets have nothing left in for the future would surely be left out. Technically, the Nifty would keep correcting from time to time and for those who were not in the markets in the last bull market please see the charts in the era of 2005 – 2007 where the markets corrected but rallied further North.

Right approach at the right time will help all intelligent investors to gain in the years to come.

The figure no.2 displays where the Index is positioned now in the current Bull Run which started in the year 2014... Therefore to conclude, the current correction in the “Awareness Phase” should be your last chance to buy. Next comes the “Mania Phase”. So your time to Invest is now!!!

— Kiran Jadhav – CMD.

Precision Investment Services.

kiran@pis.net.in

 

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