jdjoshdias

NIfty outlook for 3 -12 months

NSE:NIFTY   Nifty 50 Index
Nifty is selling off and we can blame COVID-19 or bad economy or a slow down. But the global markets have been over inflated with low interest rates. Capital markets around the world have had money pumped into them because you couldn't make any returns in other asset classes around the world.

We hear many people say that Nifty just follows US markets. That's because most of our blue chips have huge investments from US. Whenever they have a downturn they pull out money and we have the same downturn appear the next day in our markets.

The COVID-19 is like influenza which is airborne, and surgical masks and washing your hands doesn't exactly stop it from spreading. Preexisting health conditions like heart disease, obesity even smoking is supposed to make you more susceptible to COVID-19.

**The above is very important as the US and India have a high percentage of diabetic patients.**

We can hope for the best but in the worst case situation COVID-19 is here to stay for some time and I do not expect any great news in a hurry.
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I have drawn levels the market has retraced only 30% during this initial selloff. The 2008 crash had 60% fall, using that as a stencil the market may correct up to 4900 levels. The weeks ahead of us has a lot of unpredictable elements which is something the market hates.

Expecting the market to bounce up and down without any stability. The last week was all over the place hopefully it is a little better than that.

(This is my opinion and not a recommendation)
Disclosure: I have a bearish view and open bearish positions.

Comments

Crystalclear analysis....nice one
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@jdjoshdias Would I be wrong if I bought Nifty June 8000 PE @200 ??
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jdjoshdias ssharma38
@ssharma38, I cannot recommend what you should do.

But a June 8000PE at 200 would mean you have a breakeven at 7800. That doesn't look favorable as trades go. It would make more sense to take a bear put spread with a risk of 200 in the form of a spread that would enable the trade to have strikes closer to the CMP.

(Please check with your financial adviser before making any decision.)
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6700 is very much possible
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jdjoshdias bangalorean
@bangalorean, I agree. If the virus is not contained I expect 4900 to be visited before the end of this year.
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bangalorean jdjoshdias
@jdjoshdias, excepting 6100 as I posted several days prior.
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