Bseindia
My Analysis | Provide me insights where I am Wrong ? What I have done and What I believe -->
I have analyzed this chart on the basis of supply-demand and SR lines.
I have used RSI and Parabolic SAR and I am hoping the price will not bounce from the upper level, Because this level of demand served 3-4 as demand level in previous months and most probably it will serve the Demand area Also.
Please tell me where I am wrong and provide me positive feedback.
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NIFTY (Strategy)Hi Everyone,
We are in a great period of time with great momentum and bullishness in the market, one of the fastest recoveries in history from the dip. The momentum seems to be really good but there comes the catch.
The stretch we are currently seeing is filled by strategies laid out by the Government/RBI, not because of real GDP growth.
One of the Important points we have to note is the current NIFTY PE Ratio is standing at 36.73 (To be frank, we have never seen such a high PE ratio in the last 10-20 years). We are at a critical stage, that NIFTY 50 companies need to generate at least double their profits to reduce the PE ratio between 20-25. Will this happen quickly? Anyone can answer this question.
My point here is: The current chart shows we are at a critical point. We may go higher/lower depending on the below points,
we still have some bullish catalyst for the markets to go higher: New stimulus package approval before Christmas by Biden.
We also have a bearish catalyst for the markets to go lower, Biden to introduce Higher corporate tax rates and Higher Long term capital gains tax.
But please be aware anyone having long positions, have the below strategies until the market gives a clear view:
1. Trim the positions
2. Keep tight stop loss
3. Buy Nifty Puts with risk management (for Ex: if your portfolio is 1 lac - keep 10% for buying put options this can help you protect your portfolio in downfall)
Having good trading strategy is very important, so please keep a close eye on NIFTY
Thanks!
Disclaimer: This is just my view and not trading advice