Fundamental Analysis :-
Most stocks had moved way ahead under the bullish scene. With a brutal fall of around 7% in a month in Nifty thanks to the IL&FS episode the bulls have been shaken. Lets look at the reasons for this bearish scenario :
1. IL&FS has defaulted on commercial paper, inter-corporate deposits & others thus rating stands as junk.
2. An uptrend in Crude Oil is causing CAD to widen as exports are slowing and pushing INR towards 75 against dollar.
3. RBI is now in dilemma as inflation is under control but FED has been raising rates and any further drop in INR would mean increase in Interest Rates -- RBI Meet 5'Oct 25 bps hike in interest rates --
4. Nifty PE ratio had reached 28 -- whenever Nifty PE ratio reaches near 27 as in the past correction sets in.
5. General Election Ahead - 2019
Now Technical Analysis :-
We had thought that there was a chance of wave 5 approaching 12200 within october/ november 2018 but after the correction the top has been made and wave 4 correction has started. BankNifty was giving signs of weakness but the fall came unexpected.
-- Wave 4 correction would be fast and deep -- Targets 8100 by early June 2019 --
-- Bias Indicator : Yes Bank -- This stock has corrected by 50 % from the top i.e. 400 even though it is related to removal of current CEO but still we are expecting a fall like this in many Banking Stocks.
Look for NBFC's as a shorting candidate, major private sector banks and even IT sector as we have a doubt they will reap benefits of weaker INR ( look for quarterly results for IT ) --
------ Short on Bounce on Nifty / Stocks ------
------ Accumulate Pharma Stocks on any correction ahead ------
Most stocks had moved way ahead under the bullish scene. With a brutal fall of around 7% in a month in Nifty thanks to the IL&FS episode the bulls have been shaken. Lets look at the reasons for this bearish scenario :
1. IL&FS has defaulted on commercial paper, inter-corporate deposits & others thus rating stands as junk.
2. An uptrend in Crude Oil is causing CAD to widen as exports are slowing and pushing INR towards 75 against dollar.
3. RBI is now in dilemma as inflation is under control but FED has been raising rates and any further drop in INR would mean increase in Interest Rates -- RBI Meet 5'Oct 25 bps hike in interest rates --
4. Nifty PE ratio had reached 28 -- whenever Nifty PE ratio reaches near 27 as in the past correction sets in.
5. General Election Ahead - 2019
Now Technical Analysis :-
We had thought that there was a chance of wave 5 approaching 12200 within october/ november 2018 but after the correction the top has been made and wave 4 correction has started. BankNifty was giving signs of weakness but the fall came unexpected.
-- Wave 4 correction would be fast and deep -- Targets 8100 by early June 2019 --
-- Bias Indicator : Yes Bank -- This stock has corrected by 50 % from the top i.e. 400 even though it is related to removal of current CEO but still we are expecting a fall like this in many Banking Stocks.
Look for NBFC's as a shorting candidate, major private sector banks and even IT sector as we have a doubt they will reap benefits of weaker INR ( look for quarterly results for IT ) --
------ Short on Bounce on Nifty / Stocks ------
------ Accumulate Pharma Stocks on any correction ahead ------
Trade active:
Trade active:
We think 10000 is on Nifty within this week which would complete wave 3 most probably !!
Trade active:
Either this is wave 5 or ABC correction !! Any gap down on tuesday would mean wave 5 on downside. Many stocks are also just at support levels .
Trade closed: target reached:
