[carboy]

Originally Posted by AZT

Govt would probably suspend trading if it even gets anywhere near here.

Why would they do that? And why should they do that?

[Thebat]

Originally Posted by deetee

Nothing changed much. 'Around' 11000 mark of Nifty index is a sure shot, I can't estimate the time frame. That's why I mentioned 'a few months' . What happens then is something not clear at this point. It may bottom out or otherwise there will be deeper rout (not impossible).
No, Government will not get involved in this. Because, this is a structural bear market now and there wouldn't be any sudden deep crashes that can trigger circuit breakers. Prices will slip slowly and systematically.
Depending on how long it will take to bottom out, market will proportionately take longer to recover back to this high levels.

Could you, if possible share the basis or the methodology used for your analysis?

Nifty hitting the levels that you are mentioning looks improbable with the current market environment unless there is another black swan event that might unfold over the coming months.

Would love to hear your thoughts on why you feel that nifty would go down to those levels.

[deetee]

Originally Posted by Thebat

Nifty hitting the levels that you are mentioning looks improbable with the current market environment unless there is another black swan event that might unfold over the coming months.

There need not be any occurrence of another black swan event to make this happen.
I mention this again - the present bear market started off in October last year as a cyclical correction and gradually turned into a structural bear market. Under such conditions, the decline will be deep and prolonged. We can point to many reasons for that but bottom line is - it is just bound to happen and it happens.

Unlike many bhpians here, am not into financial markets as an investor. I am a short term trader with primary focus in derivatives. I earn my living from that. I have certain strategies, some of them unconventional, that work well for me. So, my views are predominantly based on technical analysis. It has worked well for me so far. If what I mention here is not inline with someone's views, lets agree to disagree. Markets have a broader mind of their own, what matters is whether we are understanding the direction markets are taking within a certain reference time frame.
With that disclaimer off the line, let me give basis to my views.

I will start off with what triggered my bearish views:




So, in October last year (2021), there has been major correction (which ofcourse is cyclical) and markets seemed to recover within a few weeks. But, they couldn't sustain it and then they entered an intial phase of structural bear market. This happened in February - March. That followed with a strong rebound (phase 2 of structural bear markets) and then started the long leg of decline (phase 3), which we currently are experiencing.
In February this year, I got curious about the longterm market movement and so went to back to check what happened during 2008 and during the great depression crash of 1930's. They all started on similar line of market activity. This time, I think, the primary cause is the extended period of cheap money ( due to very low interest rates) that has been flowing into the markets for the past 2 years. Whatever be the reason, as the rates are being hiked, some of that money is being withdrawn from primary markets and other areas of investment which is causing the present decline. However, if this withdrawal of money is extended over a few months, then there can be cascading effects of it which will lead to further crash in the financial markets.
The below chart is the basis for my estimation of how far NIFTY index can crash ( I did this in Feb this year and so far each step of my estimate is holding up well )


The reason I believe this prolonged crash can bottom out around 11k levels (10700- 11900) is that circled part in the chart, where the index can get very strong support. That is a wide 1000 point zone, because as can be seen from the chart, there is a very long running channel( valid for past 15 years) . This channel's bottom may come upto some where in this 1000 point zone by around November this year. My estimate is that index will hit this point of confluence and then will consolidate and progress along the channel - which again means recovery to 18000 level will be a long process.
All this if market bottoms out there. If the economy then seems very gloomy and market can crash beyond this zone. Then I don't have any estimate of where it can find a bottom - a rough estimate is 7k - unlikely but not impossible.

After reading all this, you may shake your head in disbelief but that's ok. Market will not crash just because I said so, all I am trying to do is to think in the direction of the market. If all this doesn't happen, then it's good for everyone. I will then change my view and align with the market happily. But for now, this is what I think the direction markets are heading.

[SmartCat]

Originally Posted by deetee

Unlike many bhpians here, am not into financial markets as an investor. I am a short term trader with primary focus in derivatives. I earn my living from that. I have certain strategies, some of them unconventional, that work well for me. So, my views are predominantly based on technical analysis. It has worked well for me so far.

We have thread on Derivatives here:
https://www.team-bhp.com/forum/shift...es-thread.html

You can post your short/long term technicals views on index/stocks there (but not much activity on that thread though).

[carboy]

Originally Posted by deetee

There need not be any occurrence of another black swan event to make this happen.

I agree. I haven't done any actual analysis to figure out how far down it will go but I think we are going to go down a lot. Most noobs seem to think we are still in a bull market & that this is a correction & "buy the dip".But there are a lot of things happening which leads me to believe that this isn't so. We surely aren't in a bull market. We aren't yet in a bear market but we are somewhere between the two & what is currently happening is most certainly not a correction like many "noobs" think.

- Feds have started Quantitative tightening. They will be be shrinking their balance sheets by around 140 Billion$ over the next 3 months & by 290 Billion$ in the 3 months after that

- Feds will be regularly raising interest rates for at least a year and a half more. The market has priced in only around 3 hikes till now.

- US is almost surely going to recession

The sentiment is quite bad that when some kinds of bad news comes, the US market has occasionally jumped up in the last month - this is because many people think if the news is very bad then it may cause the Feds to slow down the Quantitative tightening & the interest rates hikes.

I also think Q2 Indian company results are going to be quite bad. Inflation has increased raw material costs high & most companies will be either cutting margins steeply or raise prices leading to lower consumption. Rural demand has also gone down badly. MSMEs are in quite a bad shape - this may good for the big companies in the stock market in the near term but is bad for the country in the medium & long term.

[spookey]

Originally Posted by Thebat

Nifty hitting the levels that you are mentioning looks improbable with the current market environment unless there is another black swan event that might unfold over the coming months.

Anything is possible and no levels are sacrosanct where numbers are involved, I thought i had seen it all until i saw this broke my belief of levels of 0 to infinity holding up till perpetuity
https://www.cnbc.com/2020/06/16/how-...s-trading.html

[K_Drive]

Originally Posted by deetee

The reason I believe this prolonged crash can bottom out around 11k levels (10700- 11900) is that circled part in the chart, where the index can get very strong support. That is a wide 1000 point zone, because as can be seen from the chart, there is a very long running channel( valid for past 15 years) . This channel's bottom may come upto some where in this 1000 point zone by around November this year. My estimate is that index will hit this point of confluence and then will consolidate and progress along the channel - which again means recovery to 18000 level will be a long process.
All this if market bottoms out there. If the economy then seems very gloomy and market can crash beyond this zone. Then I don't have any estimate of where it can find a bottom - a rough estimate is 7k - unlikely but not impossible.

Excellent chart deetee. My assumptions are also inline with yours. The trend lines I have drawn are slightly different but it do follow the channel you have mentioned.

Attaching the daily, weekly and monthly chart.

This is the chart I follow to understand short term trends:


This one gives idea about medium term trend:


The monthly chart gives idea about long term trend:


Market will comedown to its long term channel which we can trace back to 2004. However, no one can predict how soon and when we will reach there.

[Latheesh]

Originally Posted by carboy

- US is almost surely going to recession

On a lighter note (source: wallstreetbets sub on reddit). Major recession indicator!!

[deetee]

Originally Posted by SmartCat

We have thread on Derivatives here:
https://www.team-bhp.com/forum/shift...es-thread.html

You can post your short/long term technicals views on index/stocks there (but not much activity on that thread though).

Thank You, I missed that thread. Subscribed to it now.

Originally Posted by K_Drive

Market will comedown to its long term channel which we can trace back to 2004. However, no one can predict how soon and when we will reach there.

I am glad that you have concurred with that very long term channel. That seems to be the stable pathway ahead. Any breakouts/breakdowns are being pulled back into it. I agree that estimating time period is a lot tricky. The sooner we reach there, that much faster will be the recovery. But a slow, steady fall will drain lot of resources and eventually recovery also will be quite longer. Lets see how this unfolds, no point in trying to speculate too much.

[thirugata]

Good to see some technical analysts here and delighted to see charts.
Airtel seems to be in a tricky spot. Only thing that is going in its favor is, it looks bit oversold. Had posted this on twitter today.
https://twitter.com/kiranirao/status...55582413189120



Attaching some long term analysis on indexes I have made.



Nifty has immediate demand area of 16000 - 15500 range. Expect it to be defended before further breakdown.



NiftyJr, 35500 - 33500 should be demand area on the downside.



Midcap, 24700-23000 should be demand area.



Smallcap , 8600- 8000 should be support zone.

Horizontal white line in all the above charts are 38% retracement from Oct 21 high to Mar 20 lows which is a Fibonacci support. Only smallcap has hit that, rest pending. ( I am mentioning 38% because , it is considered a minimum of 38% retracement is a must for a healthy upmove in the next cycle.)

[Quoter]

Interesting to see so many technical analysts on this forum. To start with a disclaimer, I am a fundamentals guy, no technical analysis for me.
I too have been bearish about the market for some time now. The economic sentiment is still not reflecting the pain that lies ahead (Just look at our unemployment numbers). We are looking at a period of high inflation over the next 12 months. And given the global efforts on climate change, energy prices might actually remain high for a much longer period, cascading down to higher prices for everyday use items. The bottom might come sometime in the next 12 months, but the recovery will be a slow, painful process and could take much longer.
Having said that, this is a stock picker's market. There are many stocks which have already fallen significantly from their highs reached last year. The headline NIFTY is being held by a few stocks (primarily Petrochemicals and Banking) which have performed very well over the past two years and are actually benefiting from some of the things happening around us (High refining margins for oil, high growth in loans for banks from a low base etc.) So, while I am exiting a few stocks which have run up a bit, I am also evaluating a few other stocks which have already fallen over the last 3 months (None of these are the fancy IPO's which happened in the past 12 months).

[deetee]

Originally Posted by thirugata

Horizontal white line in all the above charts are 38% retracement from Oct 21 high to Mar 20 lows which is a Fibonacci support. Only smallcap has hit that, rest pending. ( I am mentioning 38% because , it is considered a minimum of 38% retracement is a must for a healthy upmove in the next cycle.)

Thanks for sharing your analysis.
For the Nifty 50 index, that 38% percent retracement level corresponds to 50% of the strong bullish candle of May 2021. Also that level spans across Feb-May2021, that is 4 months of activity (during covid 21), which can be a very strong demand area. When the index drops below this level, it can be a free fall for another 2k points.

Originally Posted by Quoter

The headline NIFTY is being held by a few stocks (primarily Petrochemicals and Banking) which have performed very well over the past two years and are actually benefiting from some of the things happening around us (High refining margins for oil, high growth in loans for banks from a low base etc.)

I also have pondered on this. Reliance and Banks together contribute to about 46% weightage in the Index. So far they are holding up , but when they start tumbling, it would not take long to see the lower levels of Index.

P.S. it seems like stock discussion in this thread are fundamentals based. To avoid cluttering that with technical analysis, taking up the suggestion of Smartcat, I am posting my charts on derivatives thread. I request other members to contribute their technical views there, if it suits you. Thanks.

[deetee]

I have been following an hourly channel on Nifty 50 index for the past few days. It started on May 11th and has been holding up so far. Looking forward to read the opinions from fellow members.


I think the index will consolidate a bit before breaking down.

[thirugata]

Originally Posted by Quoter

Having said that, this is a stock picker's market. There are many stocks which have already fallen significantly from their highs reached last year.

The stocks that have fallen more than the index are under-performers. Fundamental analysis might show it as value pick, but commonsense says in a side ways market strong stocks have to be held, if there is a compulsion to hold the stocks. Stock picking should be done when the turn around happens.
If you are referring to a short term bounce that you are looking to catch, then yes, stock picking can be done. I am just airing my view based on my biased view of market.

[pk1972]

Glad to see the depth of the analysis here in the forum. What would be the effects of an prolonged bear market on say housing? It’s an sector which seems to defy logic in most markets across the country. Do we have an similar thread / analysis around the housing markets?