About

Ahead of the Curve provides analysis and insight into today's global financial markets. The latest news and views from global stock, bond, commodity, and FOREX markets are discussed. Rajveer Rawlin is a PhD and received his MBA in finance from the Cardiff Metropolitan University, Wales, UK. He is an avid market watcher, having followed capital markets in the US and India since 1993. His research interests include capital markets, banking, investment analysis, and portfolio management, and he has over 20 years of experience in the above areas, covering the US and Indian markets. He has several publications in the above areas. He currently teaches business and management students at CHRIST University. The views expressed here are his own and should not be construed as advice to buy or sell securities.

Showing posts with label support. Show all posts

Friday, 24 July 2015

Indian Stock Market Nifty Index, Technical and Fundamental Snapshot

As we are well into 2016 I thought it would make sense to look at the technical and fundamental snapshot of the Indian stock market #Nifty index. First the technicals. For this I turn to Brahmesh at Brahmesh Technicals. The Nifty has had a bullish break out over the 8000 mark. It is now turning down from old highs near 9000:
nifty technicals

Next the fundamentals, for this I turn to Sanjay Jaiswal at Market Pulse for the daily updated trailing #P/E ratio on the Nifty. As you can see below despite the recent fall it stood above 20.0. The market is obviously overvalued at an earnings yield of less than 5.5%:

nifty fundamentals

Support: 8000
Resistance: 8400

Taken together the market appears over extended and ready for a fall both on technical and fundamental grounds.

Nifty Fundamental and Technical Snapshot http://t.co/pvruEj2HB3 pic.twitter.com/efIXg4BfRD
— samuelR (@RajveerRawlin) September 6, 2015

My Asset Allocation Strategy (Indian Market)

Cash - 40%
Bonds - 20%
Fixed deposit - 20%
Gold - 5%
Stocks - 10% ( Majority of this in dividend funds)
Other Asset Classes - 5%

My belief is that stocks are relatively overvalued compared to bonds and attractive buying opportunities can come along after 1-2 years. In a deflationary scenario no asset class does well other than U.S bonds, the U.S dollar and the Japanese yen, so better to be safe than sorry with high quality government bonds and fixed deposits. Cash is the king always. Of course this varies with the person's age.