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


(arvind.calyx) #673

Seems like Nifty is in Downtrend… I think it will go till 9000 levels… Shorted Nifty futures at sharp 9:30am today :slight_smile:


(Dragon) #674

I feel you should wait for close below today’s low and also the volume confirmation is required.I haven’t checked today’s volume…

Having said that if BJP wins big then that flag is going to be null and void…


(arvind.calyx) #675

Well It seems the market has changed trend… And if market has actually changed the trend then election results might give a day or two days rally but it won’t change the trend.


(pkk123) #676

How did you calculate 9000 target?


(Bheeshma Sanghani, PhD) #677

It’s a bit premature to call for a change in the broad trend looking at the daily. If there is a series of lower highs and lower lows on the weekly with diminishing volume on the highs then you would have a decent bear case at a technical level. 18-12 which is the date when the guj election results are due - expectations will be reset. Up or down remains to seen as of now and either ways it should not impact the basic investment process of finding quality businesses at sober valuations.

The 10k level is the big one that needs to be tested properly. So far it has not been properly tested by the market and the guj elections provide a good opportunity for participants in the market place to have a go to see whether it is a sound one. Unless that test happens the market will remain weak in my view.


(J2EE Professional) #678

lower low on weekly charts is still not formed and wont happen till we have alteast 2 days closing below 9680 approx. Also, given that it also coincides with 200 ema, it will be strongly defended by the bulls. so the trend remains intact as of now.


(Bheeshma Sanghani, PhD) #679

True. That’s why a test of 10k looks imminent and an outcome on that should provide clues on the general market direction.


([email protected]) #680

Market sensing uncertainty in Gujarat election outcome …causing lower high and lower low in daily chart.sense of confirmation will be represented well in daily and weekly chart…


(arvind.calyx) #681

It looks in downtrend on weekly chart as well. If it gives a closing below 10122 in this week then it would be confirmation on weekly chart as well.
Lets see what future holds ahead. A correction of 8-10% would be healthy for the market.


(J2EE Professional) #682

actually, the way you are representing is different. If something is there in daily charts, it would be there in weekly and possibly in monthly charts as well (as well as hourly charts). This is a channel that you are talking about. What I am talking about is a downtrend in terms of lower highs and lower lows and on weekly charts. That is different from channel. I hope it clarifies things.


(arvind.calyx) #683

I did not get what you are saying… It would be better if you could explain in term of numbers or chart.
Would like to see things from your angle as well.
Thanks


(Amit Jain) #684

IMHO

Technical Analysis should be carried on in the respective thread. Will attract more informed participation.


(manivannan.g) #685

Just read that the exit polls favours BJP. So, time for some optimism. Even if it turns out to be a negative, a great opportunity for buy.


(Amit Jain) #686

Gujarat Exit Polls were placing BJP at 115 seats. But, fell seriously short, that too on home ground. This gives us a fair view of what may happen in other states.

When markets are expensive, price becomes much more sensitive to bad news. There is already a inherent, natural, momentum for the prices to go back to the mean, and if coupled with a bad news, market simply dives for the mean.

It won’t be anything extraordinary for us to see Nifty at PE 17 as it remains there 75% of all trading days. That would bring it to the level of 6500 to 7500 in the near future.


(Dragon) #687

Most of them talking about price coming down but why are you not considering earnings going up and maintaining PE ratio around 17?

As we know earnings are cyclical and they can pick up any time and bring the much inflated (??) PE ratio down.


(Mandbudhijaat) #688

Interesting. Did you consider Earnings may go up as well? I don’t see even remotely that Nifty can go to 6500 @ current economic scenario


(Mandbudhijaat) #689


One important thing to consider is that Average P/E has been inching upwards meaning what was abnormal in 1995 may be completely normal in 2014 or 2017 !


(Left this forum) #690

http://minervini.com/blog/

I think all of us should digest what Mark trying to say. Of course one can ignore trader/investor from mind while putting a common hat. The words are hard hitting but I guess need of day.

Although this is in respect to US markets, our markets are no different. Speculation never going to change. Time to measure and walk, when investment becomes mela to twitter stories it further indicates a thud somewhere near.


(Amit Jain) #691

Current EPS for Nifty is 390
Lets look at an optimistic figure of Nifty 9500, worst case at PE 17… then EPS has to become 560; That is a 43% growth of EPS from here on.

Well, at 9% growth it will take 5 years for EPS 390 to become 560. Therefore, one can conclude that the market will have to shake off all bear market scares for next 5 years. I think that is a tall order.


(Mandbudhijaat) #692

I am rather interested in random 6500 figure. How did you reach there? I don’t deny market may fall or languish in near future but don’t anticipate 40% fall. Also, on your calculation, you are missing the point 1. Growth is compounded not additive i.e. if 1$ grows at 9% for 5 years, it will be 53% increase not 43% 2. You are assuming 9% growth i.e. not anticipating any earning re-rating especially when we are past demonetization and GST setbacks. Any specific reason for that or are you upset in general today?