Sensex touched 50k, budget's coming up, what’s next?
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Sensex touched 50k, budget’s coming up, what’s next?
With such a plethora of opinions and views about markets, it's quite a challenge to sift through all the information overload and get a sense of what’s happening. There is Greed, and there is Fear, and nothing's Clear!
So, I thought I will detox myself of all opinions and try to develop an experiment, an educational endeavor, to see if I can try to make an attempt to understand the complex market behavior - leveraging some of the tools and techniques I have studied & loved over the years. I went on to develop three models, covering a span of 20 years (from year 2000 to 2020) - projecting next possible NIFTY levels. I will share what my most likely model looked like.
But first, I would like to encapsulate some of the most prevailing opinions in the air right now:
• Top analysts’ survey predict a trading range of 14k-15k in 2021
• Some market experts quoting the Buffet Indicator nearing overvalue zone suggesting correction
• Some leading analysts and Bulls want us to not be fearful and believe in the India Inc. story and are bullish on the upcoming budget too
• Whilst some analysts are sitting on the fence and some are even calling a doomsday
We have all possibilities covered and we still have no real dominant opinion!
Before I share possible projections of my model, I would also like to mention my tools of choice for this analysis, which are:
• Fibonacci Analysis
• Elliot Waves Analysis
• Multiple Exponential Moving Average Analysis
• Some Classic Charting over multiple time frames
• Human Judgement :p
Here’s the hypothesis – It appears Nifty right now has a crucial support level at 14,350 levels and the markets appear to be trending in a sharp rising ‘Wedge’. It definitely looks on thin ice right now, and the next major target on the upside, based on a long-term-20-year analysis, appears to 15,500 levels. Beyond that – there’s a high probability for a major correction which may even develop into a major land-slide with a risk of achieving 10-11k levels and a chance of even reaching covid-panic levels! Scary – I don’t like this model myself 😊
If the market stages a correction from the current crucial level, next support levels / downside targets (approx.) appear to be – 14,100; 13,800; 13,500; 12,500 and then 11,000-10,600 levels.
Before wrapping up this article, I would like to mention an amalgamation of wisdom from different quotes, which I, as a student of markets, live by
– “Even if you are exceptional at this, you’ll be wrong half the time! The key is to know what you own, and also, cut your losses short and let your winners run!”
Therefore, I expect the model to be broken, but all I endeavor to do is to learn, with the same token.
Best,
NS
With such a plethora of opinions and views about markets, it's quite a challenge to sift through all the information overload and get a sense of what’s happening. There is Greed, and there is Fear, and nothing's Clear!
So, I thought I will detox myself of all opinions and try to develop an experiment, an educational endeavor, to see if I can try to make an attempt to understand the complex market behavior - leveraging some of the tools and techniques I have studied & loved over the years. I went on to develop three models, covering a span of 20 years (from year 2000 to 2020) - projecting next possible NIFTY levels. I will share what my most likely model looked like.
But first, I would like to encapsulate some of the most prevailing opinions in the air right now:
• Top analysts’ survey predict a trading range of 14k-15k in 2021
• Some market experts quoting the Buffet Indicator nearing overvalue zone suggesting correction
• Some leading analysts and Bulls want us to not be fearful and believe in the India Inc. story and are bullish on the upcoming budget too
• Whilst some analysts are sitting on the fence and some are even calling a doomsday
We have all possibilities covered and we still have no real dominant opinion!
Before I share possible projections of my model, I would also like to mention my tools of choice for this analysis, which are:
• Fibonacci Analysis
• Elliot Waves Analysis
• Multiple Exponential Moving Average Analysis
• Some Classic Charting over multiple time frames
• Human Judgement :p
Here’s the hypothesis – It appears Nifty right now has a crucial support level at 14,350 levels and the markets appear to be trending in a sharp rising ‘Wedge’. It definitely looks on thin ice right now, and the next major target on the upside, based on a long-term-20-year analysis, appears to 15,500 levels. Beyond that – there’s a high probability for a major correction which may even develop into a major land-slide with a risk of achieving 10-11k levels and a chance of even reaching covid-panic levels! Scary – I don’t like this model myself 😊
If the market stages a correction from the current crucial level, next support levels / downside targets (approx.) appear to be – 14,100; 13,800; 13,500; 12,500 and then 11,000-10,600 levels.
Before wrapping up this article, I would like to mention an amalgamation of wisdom from different quotes, which I, as a student of markets, live by
– “Even if you are exceptional at this, you’ll be wrong half the time! The key is to know what you own, and also, cut your losses short and let your winners run!”
Therefore, I expect the model to be broken, but all I endeavor to do is to learn, with the same token.
Best,
NS
注释
Now that Nifty has had almost visited a crucial Fibonacci 1.618 level of a 20 year pattern, and almost revisited it again, its advisable to tighten the protective stops on the long positions and witness the pattern develop over the course of next few days. If its an exhausting wave, once it breaks the current support level, next support levels seem to be - 14,350 levels, 13,350 levels, and extreme strong sell-offs could even lead to a landslide to even 11,500 - 10,800 band to covid levels.
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