Nifty PE crosses 24|A statistically informed entry-exit model!

(Devaki Nandan Tripathy) #653

Worth a look.


But they definitely see lot of value in Bitcoin

(Amit Jain) #655

Price correction not important. Only PE correction to normal is reason enough. Price correction may or may not happen to expectation.

(pkk123) #656

But then how will this strategy beat the index?

(kishor barhate) #657

Valuation as on today: another perspective

Country: India (updated daily) check out Global Overview of detailed

Ratio of total market cap over GDP: Maximum - 158%; Minimum - 40%; current

  • 72%
    Expected future annual return: 15.2%

ETF Used for dividend yield: INDA (Yield=0.57%)
Market Index used: BSE SENSEX
Current Annual GDP: $2,453 billion US dollars or 159,582 in billions of
national currency (GDP in Local Current Prices Annual Growth=13.91%)
Data since the year 1997

Kishor Barhate

(Changu Mangu) #658

Nifty 500 PE, Dividend, P/B Excel from 1996 to date.

1996-2017.xlsx (245.4 KB)


Hi Thanks for putting this up. Is this consolidated or standalone number.

(Changu Mangu) #660

Hi @nav_1996. Standalone. From start date to current.

(Devaki Nandan Tripathy) #661

Interesting view on China and its impact on global markets.

(josephseby) #662

I am posting charts of williams accumulation / distribution

Here the accumulation lvls has brocken the trend line from 2016 feb lows of 6800 nifty. (blue trend line)The breakdown happened on nov 30th. The breakdown when Nifty PE is above 26 requires caution.

This is the williams accumulation / distribution charts from 2009 lows. The present accumulation lvls is approaching the long term trendline which was formed after a breakout of the then trendline in January 2012.(red trend line).
Sorry i was not able to post a chart with X axis( ie date axis )

(josephseby) #663

Here I am posting a chart for India Vix

. A clear breakout can be seen in the India Vix trend which was intact from 2014. This means more volatile days may be ahead.

(Devaki Nandan Tripathy) #664

Whenever you post charts, please make sure you make the time series axis visible too, that would be helpful.

(Bheeshma Sanghani, PhD) #665

I have found key reversal days to be a good quick and dirty indicator to identify a possible correction. They work particularly well on an index. While market timing is beyond my understanding but i believe one should be observant and possibly learn a few tricks that could help. Even the venerable Benjamin Graham was observant of market prices while laying down the intellectual framework of value investing. A key reversal day is when there is a new high and the market closes below the low or near the low of the previous day.

An interesting observation - in the past few instances of key reversal days the market corrected but the correction hasnt extended to below the previous low - basically there was no lower low. In the most recent correction there is a definite lower low. However one should ideally like the market to put in another one of these lower lows coupled with a lower high to be of significance possibly in the wake of some really good news on the economy. I think quarterly gdp numbers have shown an uptick on the same day the market put in a low.


(Amit Jain) #666

Candlestick patterns is a game of probability. One does have a 5% advantage. However, all the occurrences must be acted upon, else all the probabilistic bets are off. So it is really dangerous. I mean, it is dangerous because it looks simple, wherein we see an occurrence and act. But, that is not the reality. Several mental and cognitional biases come into play. It is murky, and not simple to say the least.

It is a hoax. There is no uptick. It is governments strategy to highlight a shred of good. Having read todays TOI center page article by Swaminomics
I am convinced even more. People do not have money to spend. Especially, the sectors of expensive things (the non-essetials) like homes, cars and jewelry are down and out. People are cheering new stock market highs, I worry.

PS: Do not agree with the Gau Rakshak argument in the article. As there are environmental damages.

(Bheeshma Sanghani, PhD) #667

Hi @jamit05

I find Key Reversal Days an interesting tool . Like all other tools in TA - there is a unknown failure rate rendering them inadequate as an investment basis. However , some of these tools do help you in gauging the temperature from time to time which may be useful in postponing or preponing some actions you may want to take in individual positions to get more favourable price terms.

(josephseby) #668

Sorry in my previous chart the time axis was not clear. Pls find the Nifty 50 (blue one)Vs Indiavix charts.(red one). A clear breakout from the trend for past 3 years is seen on india vix. So we may expect increase in volatility in days ahead. The success of a long term investor may depend on how he behaves during the volatile days and during the drawdown period.

(Amit Jain) #669

A break in long held VIX trendline indicates important changes in the underlying volatility (dynamics of either buying or selling), and hence often foretells change in price trends as well.

(Billu) #670

How does one play volatility. India VIX futures are not traded and options are not liquid for farther month for most stocks.

(PavanM) #671

You would want to construct (or buy directly) a straddle; premium will be high as they are usually struck ATM.
For lesser premiums you want a strangle. They are struck slightly on either side of ATMs.

However, in India, (I feel), there are not enough long dated index options - going beyond 2 months. With time decay as a factor in options market, buying such instruments turns out to be a gamble.

‘I think within the next month or two Index will fall’ or ‘if the govt wins the ensuing state election markets will rise, but if they drew or did not win, the downside is high’ turn out to be guess work.

Ideally an years worth of liquid options is a good buy; long dated options could be used as a hedge - as their premiums will be less. Long dated OTM options are ideal because they ‘fly’ the most; a good example is a bird; its body or central axis can be thought of as ATM options. When it flaps its wings, the points on the wings, on either side of the body will go up (and down) lesser compared to the tip of the wings which are furthest. With options (Long) the down side is limited hence those OTM options fly.

However, mine is bookish knowledge, I would stand illuminated if there are practitioners in this forum who have found unique ways to overcome this limitation of time and high premium in the Indian context.

(Bheeshma Sanghani, PhD) #672

Continuing with the chart posted above shows that a down channel is in place. The prices have rebounded but are moving symmetrically within the channel - with bounces of the 38.2 & 50 levels. It will be interesting to see what happens next. As of now it does seem that a reactionary downtrend is in progress with a lower high and lower low within a channel. If the channel holds - then prices should go all the way down to 10k roughly, which is the 61.8% fib level.