Market conditions: When to buy shares ?

Overall all portfolios are down heavily in the last 7-11 months and for the next 3-5 months, don’t expect any kind of rally or any kind of recovery in the market, especially in small and midcaps. Even if you are having any large-caps then they are also down by 10-15% from the recent high.

Every Investor in the world facing this heat because all world markets are down heavily in the last 2 months. You can check the US, EUROPEAN, CHINESE, JAPANESE all these market are down and emerging markets like Indonesia, Turkey, Nigeria are down heavily, Not a single emerging or developed market is in green sign.

As per my last post about the Global Market Report which I publish on My Facebook Page, I alerted all that next fall in World market will be because of US & European Market and in the last 2-3 months they were down by 5-10%, and Each asset which I discussed in that report moved as per the Technical chart, Like crude hit 85$, Dax was at 11800 level now it is as 10800 levels, Fang stocks down by 20% in the last 2-3 months, Bearish pattern was there in Ethereum at $190 now after completion of pattern it is at $80 ( My Near term target is $50 for Ethereum and $2500 for Bitcoin, Both Bearish).

Facebook Page post: Global Market view 9th September 2018.

Overall I am waiting for S&P to hit 2500, DAX to hit 10400 and DOW JONES to hit 23000 marks, only after that I can say some small bounce will be there but till then it will be a Panic like the situation in Global Market. As per my target, Developed Global market have to go down by at least 4% (minimum), and What if these Heavyweight are down then what will happen to Emerging market? A Big Question Mark.

? A Big Question mark with Bold letters

Our Market (NSE, BSE) is already down by 8% but midcap Index and small-caps  Index is down by 25%-40% respectively from Recent High. Still, no rally will be there in the market for the next 3-5 months, there is a huge difference between “Rally” and “short-term bounce” but people keep on saying the rally is coming, but only a short-term bounce will be there, which is there only for trapping small traders or Retail Investors. that’s Why I am writing this article to put some light on these terms and how to get an idea about when to buy and when to not.

Rally= Rally means pushing price higher and breaking previous short term high and follow up buying will always be there in market. Generally rally means 15-25% bounce of share price.

Short-term Bounce= It means only some bounce of 5-7% then again coming back to original price and it can hit new low again, no follow up buying, and share price not able to break previous short term high. 

Above statements is the actual meaning of these terms as my experience, and now I will show you how to check them in the charts, I am taking a chart of NRB Bearing ( Rally of 14% after breaking previous short-term high) and chat of Prakash Industries, from that you will get an idea of how to check all these things.

While checking the charts you have to follow these steps:

1. Check Previous High and Draw straight Line.
2. Now Check Previous Low and Draw Straight Line.
3. Check Breaking of high or Low.
4. Mark New High in case of Rally.
5. Check to Follow Up buying in case of the rally and follow up selling in case of Short-term bounce.

You can check in the above charts on how to check for Rally and short-term bounce, See if you are good at reading charts then you can also trade in short-term bounce and if you have no knowledge to how to check charts,  then don’t take trade in that, If you want to do some Investment then Wait for more downside in short-term bounce shares,  Because it will go down more again and again.

In the market, there are near about 80% of stocks showing short-term bounce, and if you are good with charts then you can take a trade with a strict stop loss, or if you have no knowledge then avoid taking short-term trades, you will get a trap for sure

Equity Market and Direction of Rupee

After election result, our market bounced back from 10400 to 10850 levels, everyone has one question in their mind why market bounced even after BJP losses 3 election states, but one thing you have to check that same time Mr. URJIT PATEL Resigned and that changed the whole election story. If this resignation was not there then the market would have been down by 300 points.

Relief Rally: In the last 3-5 months, RBI put some strict conditions on NBFC and on good stocks like Yes Bank, Bandhan Bank, and Kotak Bank, now after Resignation of Governor market expecting some tweak in these Conditions and the market is enjoying some relief rally. New Governor commented about Growth of economy while last Governor was fully focused on Bringing down Inflation. Both things are important for the market but Market analyst liked the comment of new Governor and this was one of the reasons for the market rally.

Last Week Nifty Faced resistance near 10930 levels, again if any kind of rally is there then big resistance is 10930 after that 11100 level be next Resistance, Nifty near about Support is 10700 and if market breaks this then next Good support is near 10560.

I am Not expecting any kind of big rally in the market, For next 2-3 weeks it will try to consolidate near a range of 10550-10950 and many midcaps can show some short-term bonce but don’t expect any kind of big rally.

When Midcaps and smallcap are in Bearish setup then don’t ever think of Investing any single Rupee in them, wait for proper time to Invest till then keep holding cash only.

• Small caps 90% of them are in Bearish Setup.
• Midcaps 75% of them are in Bearish Setup.
• Large caps 25% of them are in Bearish Setup and 50% are in Consolidation.

Above chart is just a glimpse of midcaps stocks which are in Bearish Setup, this means 80% of midcaps are not able to break it’s previous Short term high, and on a continuous basis they are making a new low that means they can easily trap trader with short-term bounce, that’s why I keep posting messages in my telegram channel “Hold cash only” Last time I booked some profit in 1st week of September and on 9th Sep, I alerted all for Global market meltdown after that rest is history.

When will this Correction of the market end?

Everyone has this question and everyone is asking this question on every social media platform, but no one can say this “when”, I also don’t know about it, but we can get some idea about it from chart reading. YES, we can predict when this carnage will end.

Next 3-5 months I can sense some more panic situation in the market, yes more pain is there in the market, and that will be the last one.

See whenever this kind of fall starts it will keep on forming Lower Low and Lower High ( people who have good technical analysis knowledge can check all these things in a chart).

Last leg of Panic selling: Here I am talking about Small caps and midcaps, last selling will be the big one and it will be full of panic, Overall in the market, there are 3 types of selling.

1. Small fall: No one can sense this fall in the market, it looks like simple market consolidation, some short-term bounce will be there after this fall.
2. Big fall: After small fall market keeps on forming New Low and in this case, it will convert into Big Fall, many traders sell their stocks and after that, some short-term bounce will be there.
3. Freefall: This is the last leg of selling, all small Investors will sell their shares and at that, it will form the bottom, and that bottom will act as the lowest price for next  3-4 year, slow and painful move.

Now we are entering into 3rd selling, but before that some short-term bounce will be there for sure, I mean in next 2-3 weeks you will get some bounce in many midcaps, and after that starting from January 2nd Week till April, We will witness proper 3rd and final leg of selling.

Till now Only 40-45% of Retail Investors are in a panic and We will make bottom when this % will rise up to 70%, this % I calculate as per fear in mind of retail traders, Just like they message me about market condition, I keep calculating about the person who asked me earlier about any share and from that I will get some % numbers, still many retail Traders are not in panic and for them to be in panic, market will show some aggressive move.

Last time I alerted about too much greed in the market was on 10th January 2018, and after that Market crashed heavily (For Proof you can check my facebook page Post of January 2018).

Now I am alerting about too much panic in the market for the next 3-5 months. So there is not a single reason to park money in the market. One more way to get an idea about ending of this correction is ADAG group share (this is my kind of analysis), Last time we witnessed this kind of correction was in 2012, and that time RELCAP hit low of 189 now RELCAP have to go down to 170-165 levels to get some Idea about bottoming of this correction.

Overall the most bearish stock of market is Tata motors ( as per comparison of all fundamental good stock). It will also try to hit bottom near about in April-June 2019. I hope you all know about My view on Tata Motors for a target of 135 and 100.

Conclusion: Nifty will try to hit 11000-11100 Mark in the next 2-3 weeks, If failed then it will consolidate again with a range of 11000-10500 range.

Rupee Direction

The way our Government is working on the Fiscal deficit, I am expecting Rupee to hit 76 marks by April 2019. Overall after Resigning of Urjit Patel and some with some other factors, Global Rating agencies can put our country rating on Hold for a review, if that happen then Rupee will go down to hit 75-78 mark.

Whole global market not stable now, and our economy is going through some drastic changes as per government decisions, Next 3-5 months will be a game changer for our Market, If you are entering Market for Investment then make sure you only Invest in Large caps, If you are good at Taking short-term trades then go with strict Stop loss, don’t modify your stop loss levels, and for Investment-Related Information one can check all my telegram messages. Invest Wisely