Monday, May 2, 2016

Nifty: Closer to potential inflection point

Thought for the day

"Rest is not idleness, and to lie sometimes on the grass under trees on a summer's day, listening to the murmur of the water, or watching the clouds float across the sky, is by no means a waste of time."

John Lubbock (British, 1834-1913)

Word for the day

Gonzo (Adj)

(of journalism, reportage, etc.) filled with bizarre or subjective ideas, commentary, or the like.

(Source: Dictionary.com)

Malice towards none

For the sake of argument assume PM Modi is a school dropout and Rahul Gandhi's foreign degrees are all genuine and hard earned..

So what's the point?

First random thought this morning

A report suggests that only 4% Indian file income tax return. This number may be low but is not ridiculous. If all those liable to pay income tax under current law, do actually file their IT return, the number may actually not go up materially. Over 90% Indians may still be earning less than the IT thresh hold.

In his last Mann ki Baat, PM suggested experimenting with no ticket checkers in trains. Why not also experiment with no IT return? Citizens earning less than Rs10lacs per annum may just be required to visit IT department website once in 12 months to press a confirmation button that they have duly paid the tax due on their income!

Nifty: Closer to potential inflection point

Both Nifty and Bank Nifty ended the month of April, closer to their inflation points. A breakout from here will establish a new bull market that may last well over three years. However, a failure at this point may lead to a 5-7% correction in both the major indices.

As I stated earlier, in a case of a breakout, the up move will likely be led by non-financials, whereas in case of a breakdown the down move will be led by financials.

For now I shall be watching the following points closely over next 3weeks to take a call on the market direction during June -October period.

Nifty: Weekly close below 7730 for a break down and 8013 for break out.
Bank Nifty: Weekly close below 16270 for a break down and 17270 for a breakout.




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