How much NIFTY can reach?

On October 23rd 2013, the NIFTY PE Ratio clocks at 18.

NIFTY PE Ratio is the Stock Market Barometer for Fundamental Investor.

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Historical Cycles

Stock Market runs in cycles.  Whenever NIFTY PE Ratio crosses 25, there is a Crash on the schedule; 2008 January was such a stage.  Similarly, whenever the NIFTY PE Ratio goes below 13, there is a U-Turn possibility & Fundamentally Good stocks will be Cheaper to buy then.  The cycle repeats itself every 8.4 years.

A wise investor has to position for a LONG TERM VISION to take advantage of the cycles.

 

Stock Market reacts faster than Economy

Stock Market reacts 6 months before Economy. If the real economy is going to be better after 6 months, the market will show the growth today. On the reverse side, if the economy is going to be down ahead, market will do the discount today itself.

 

Future Forecast

Base on the NIFTY PE Ratio, we can see there is a steam for 50% growth ahead. 

NIFTY can go above 7000

SENSEX can go above 23000

If RBI holds the Rupee tight, then above levels are possible.

 

Stock Strategy

Current Stock Strategy would be:

  1. Do not buy Blue Chips in current price, they are over heated now. 
  2. Go for Growth Stocks with Good Margin of Safety
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4 Responses to “How much NIFTY can reach?”

  1. DNS AVATAR Says:

    U hv given a multibagger recommendation on Opto Circuits.
    What is your latest view on the same.
    Please do give your feedback.

    • Editor Says:

      Opto is under restructuring.

      I do hold the stock from Rs. 20 for a long term view.
      (not more than 2% of my portfolio)

      • DNS Avatar Says:

        Sir
        Thanks for yr prompt response.

        Would like to know whether Opto is fundamentally strong company.

        Read some reports on the issues of corporate governance and management issues.

        Pl confirm.

        Thanks and regards.

  2. Editor Says:

    Fundametally it went into debts through acquisitions! But the management is trying hard, hiring good CFOs & they have hope.. It is a high-risk, high-reward bet for now.. It should take 2-3 years to come back on heels! 🙂

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