Good rally – markets slowly entering Wait to Buy zone

Blog meant for 1 Dec 2016 Thursday

Dear friends,

A good rally after many days for Nifty as it rose by 82 points to close above the 8200 mark. Markets have somehow managed to stay marginally positive in the last 2-3 days although it had gone up too much. Global cues still remain mixed with European markets closing higher but US markets trading lower as of now.

We have to see if Asian markets can open positive tomorrow to help our markets to continue the uptrend.

The GDP figures for India for the previous quarter was 7.3% which is one of the highest in the world. However, the demonetisation of notes from Nov onwards could weaken the economic growth for the current quarter since many businesses have been hit due to the cash crunch.

We have to see how the business situation improves after some more days once there is ample supply of currency notes of all denomination. If the economy’s growth does not reduce too much in the current quarter, then it will be a very positive sign for the entire country and stock markets too.

Nifty is still in Don’t Buy zone. As per 30 days moving average graph, the following are the indications for short term –

Don’t Buy – Titan, L&T, HDFC, M&M, Axis Bank, HDFC Bank

Just Buy – Infosys

Wait to Buy – Maruti, TCS

The above indications of Wait to Buy and Just Buy can take another day or two for action since the Nifty index has not clearly entered the Buy zone.

Let us see if Nifty can continue the uptrend in the coming days in which case we may get a Buy indication for many stocks in a few days. Otherwise the current don’t buy zone indication will continue.

All the best!

Dr.Bharath Chandra