Nifty Rebounds Bonds Rally amid Volatility - Video Update

Published: Tue, 04/17/18

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Dear Members,

US Volatility indicators gave an indication that the market was absorbing all the bad news with a positive divergence in price. However PSU banks even after the recent sell off remain in a major decline phase, the near term bounce maybe over. And Karachi was the first market last year to clearly fall in 5 waves and start a bear market, it just ended a bear market rally.

CBOE VIX

Despite all the Rhetoric from trade wars to Syria and FB, the US VIX did not get past the high it made in early March, that would have been the real sign that the market is in panic. Nope. We are making lower lows short term from there. Fearful or Fearless? Less fear then before for sure, a divergence of sorts that short term is positive.

vix 130418

PSU Bank Index

The NSE PSU Bank index completed a 3 wave bounce back in wave 4 and started to decline again from the 40day average. Wave 5 down may have started and 5=1 goes down to 2500 on the index from 2941 today. However I will not rule out wave 5 extending. Fibonacci extentions for wave 5 go to 2220, and the neckline break at 2956 has a long term pattern projection to near 2000. Essentially the small bounce back in these banks is over as the result season kicks in.

psu banks 130418

Karachi

For some reason the Karachi index become the first one to break the 2009 bull market channel. And it is not correlating with the rest of the world. This week it completed a 61.8% retracement in wave B. This means that wave C down starts. This means it will now bo below 37000 and mostly to C=A or lower near 33300. Now this is not good news for us because bear markets of larger degree mean deteriorating social mood in the neighbourhood and could lead to a rise in geopolitical tensions at the border in the coming year or two. This for us is then a new Macro risk.

karachi 170418

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Rohit Srivastava
www.indiacharts.com
For accurate market forecasting. Market forecasting is a study of past data to assess
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