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What Technical Traders Are Saying About India’s NIFTY

Post a Comment September 25, 2009 – 9:26 am |   | Permalink |  Print This Post |

Regardless of what the technical traders say (and yes we have scoured the internet to get a feel of what the “majority” are doing with India’s NIFTY) - we believe the NIFTY’s surprising strength is a God-sent for bears. If you are bearish, why short anything else?

What the Techs are saying about NIFTY: Technical blogs NIFTY assessment

Resistance: 5100

Breakout point: close above 5000

Breakout target: 5400

Yes, India is an emerging market, described by many as the Asian Tiger laying quietly behind the shadows of China and deemed to be an even greater economic power. We had the privilege of accessing a 20-30 page report by one of the “Big Boys” having a target for the Sensex of 100000 (yes, thats one hundred thousand) in 2025 (the Sensex is currently trading at 16750)! What rubbish. They cannot even forecast what the NIFTY will do in the next year let alone in 16 years time. I say short the NIFTY. One of our rules is: Nothing goes up (or down) in one straight line. Sure, we are bullish on India in the long term - but it needs to and will come down. At the time of writing, with an hour left of trading, the NIFTY is still hovering at 4970-4980. Do not let this deceive you - I say short it (we have). We are on the verge of breaking Rule #1 : DO NOT OVER LEVERAGE. We are seizing this golden opportunity with both hands, and to be safe we are leaving all our Nikkei longs open. Todays movement of the NIFTY reminds us of the Hang Seng 3 days ago when it hit a high of 21900 - for the entire day it displayed strength, but gave up 200 points in the last 30 minutes and 800 points the 2 days after.

We opened another short NIFTY $5/point at 4970 (stop loss at 5150). Do not blink, you may miss the fall.

www.theinflationist.com

www.theinflationist.com

NIFTY (^NSEI) Historical Price Earnings (PE) Ratio Chart

NIFTY Historical Price Earning (PE) Ratio Chart 1999-2009

NIFTY Historical Price Earning (PE) Ratio Chart 1999-2009

Current PE: 22