Hello Friends while every one is so bullish, i decided to view other side of the charts.
The break out shown by blue lines suggests minimum targets of 10000 and maximum targets of 11200. But the Trend line shown by Red line comes around 10000 which might be touched in next
2-3 months. Around August or September when GST will be rolled market may make a medium term top around 9800-10000.
Besides charts the next thing which makes me cautious is that the overall sentiment in the market. Every one like to take part in this bull market. One of my relative to whom i suggests to invest in the market in January 2016 he just refused and said that he has no time to watch the markets and not even some extra money to invest. But last month he just call me and said that he wants to invest around 1-2 lakh and asked me to suggest some good stocks for next 2 years. What i want to say is that now every one is interested in the market and my experience says that just happens when market is likely to make a medium term top and inviting every Tom, Dick and Harry to join the party.
Next thing is market is ignoring all negative signs, well people say that is the sign of bull market which climbs all walls of worries. But i doubt on this theory. What i believe is that if market has to go up then it will not give chance to small players to enter the market, like it did from 6900 levels after 2016 budget and from 7900 after Trump Victory and above all market just survived the Demonetisation. So if market has to go much up from these levels it will not ask you to come and i am ready to go but market is making break out continuously and then stalling there asking market participants to enter the market. My gut feeling says this is a bull trap or i should say Mouse trap where upside is around 400-500 points but if i am right then from that top we can fall 1000 points.
The quality of stocks are moving now is also worrisome. Penny stocks i do not want to name there are plenty which has no fundamental news but they are getting 2x, 3x or even 10x. What just changed in these scrips in last 6 months, nothing absolutely nothing, the only reason behind is the excess liquidity which we got because of De-Monetisation. Most of which now in the system and moving into MF and Insurance companies and through them to stock market. This kind of liquidity flow can not last long.
Now in last i am not saying market has made top or you should exit all your positions immediately but what i am saying is please be cautious. In next 3-5 months we are likely to some kind of medium term top, so be selective in your stocks and watch them continuously.
Disclosure: I am not a SEBI certified analyst so please do not take this as a buy/sell recommendation and take your own decision. Further presently i do not have any short position in Nifty Futures.
The break out shown by blue lines suggests minimum targets of 10000 and maximum targets of 11200. But the Trend line shown by Red line comes around 10000 which might be touched in next
2-3 months. Around August or September when GST will be rolled market may make a medium term top around 9800-10000.
Besides charts the next thing which makes me cautious is that the overall sentiment in the market. Every one like to take part in this bull market. One of my relative to whom i suggests to invest in the market in January 2016 he just refused and said that he has no time to watch the markets and not even some extra money to invest. But last month he just call me and said that he wants to invest around 1-2 lakh and asked me to suggest some good stocks for next 2 years. What i want to say is that now every one is interested in the market and my experience says that just happens when market is likely to make a medium term top and inviting every Tom, Dick and Harry to join the party.
Next thing is market is ignoring all negative signs, well people say that is the sign of bull market which climbs all walls of worries. But i doubt on this theory. What i believe is that if market has to go up then it will not give chance to small players to enter the market, like it did from 6900 levels after 2016 budget and from 7900 after Trump Victory and above all market just survived the Demonetisation. So if market has to go much up from these levels it will not ask you to come and i am ready to go but market is making break out continuously and then stalling there asking market participants to enter the market. My gut feeling says this is a bull trap or i should say Mouse trap where upside is around 400-500 points but if i am right then from that top we can fall 1000 points.
The quality of stocks are moving now is also worrisome. Penny stocks i do not want to name there are plenty which has no fundamental news but they are getting 2x, 3x or even 10x. What just changed in these scrips in last 6 months, nothing absolutely nothing, the only reason behind is the excess liquidity which we got because of De-Monetisation. Most of which now in the system and moving into MF and Insurance companies and through them to stock market. This kind of liquidity flow can not last long.
Now in last i am not saying market has made top or you should exit all your positions immediately but what i am saying is please be cautious. In next 3-5 months we are likely to some kind of medium term top, so be selective in your stocks and watch them continuously.
Disclosure: I am not a SEBI certified analyst so please do not take this as a buy/sell recommendation and take your own decision. Further presently i do not have any short position in Nifty Futures.
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