FM Jaitley's LTCG, though not a disaster by itself, has succeeded in starting a reversal trend in markets that were headed skywards in the last 4 years. And due to its other negative policies, economically and politically the trends have reversed. And if this was not enough, the global trends have appeared that are bringing down the equity markets worldwide.
The above fundamental issues are getting clearly reflected in the domestic charts - Nifty and Bank Nifty. In mid Feb 2018, I had indicated the emergence of a Head and shoulders pattern, which is now very well confirmed. There are no signs of a medium to long term continuance of the bullish trend. Even the short term recoveries are appearing to be more the dead cat bounces.
As can be seen from the above chart of Bank Nifty, it appears headed to 23800 levels by end of March. With FIIs increasing their F&O shorts and other investors keen to close their profitable positions before the LTCG starts hitting from 1 April, and with the electoral losses and ally losses of BJP making the news, the bearish trend is here to say, I feel.
Many analysts are still showing a gung-ho attitude on the outside, stating that the long term trend is intact, that the FY2019 target of indices is higher etc etc. and they are not talking much on this reversal of trend (H&S). this is putting many small investors losing money, trying to catch the falling knife (buying at the presumed lower levels, which are not really low enough).
So, I advise people to exercise caution before buying anything. Even the best scrips can shave off 20-30% as we have seen in the last 6-7 weeks. And investors should also see historic charts, especially the 2008 one and see that even the best scrips had lost more than 50%.
The above fundamental issues are getting clearly reflected in the domestic charts - Nifty and Bank Nifty. In mid Feb 2018, I had indicated the emergence of a Head and shoulders pattern, which is now very well confirmed. There are no signs of a medium to long term continuance of the bullish trend. Even the short term recoveries are appearing to be more the dead cat bounces.
As can be seen from the above chart of Bank Nifty, it appears headed to 23800 levels by end of March. With FIIs increasing their F&O shorts and other investors keen to close their profitable positions before the LTCG starts hitting from 1 April, and with the electoral losses and ally losses of BJP making the news, the bearish trend is here to say, I feel.
Many analysts are still showing a gung-ho attitude on the outside, stating that the long term trend is intact, that the FY2019 target of indices is higher etc etc. and they are not talking much on this reversal of trend (H&S). this is putting many small investors losing money, trying to catch the falling knife (buying at the presumed lower levels, which are not really low enough).
So, I advise people to exercise caution before buying anything. Even the best scrips can shave off 20-30% as we have seen in the last 6-7 weeks. And investors should also see historic charts, especially the 2008 one and see that even the best scrips had lost more than 50%.