- In the last three election years, the Nifty has always given strong returns, i.e., 2004: 11%, 2009: 76%, 2014: 31%.
- S&P to MSCI EM price ratio at Mean+2 implies that outperformance would be seen in EMs vs. S&P.
- In the last seven years, the Nifty has given an average return of 20-25% from lows whenever India VIX has come off from 23-25% or 33% levels.
- As per bell-shaped curve, Nifty 2019's projected target is at 13,700 (calculation given below)
|Nifty Mean+2 Higher level of 2019|
|Possible Reversal Point||11,936.00|
|Possible Reversal Point||12,280.00|
|Max Intraday Target||13,673.00|
Nifty 2019 Support at 9,650: How?
- In case of a sell-off, the Nifty's value derived after deducting Mean+1 level from its heavyweights (80%)
|Security Name||Industry||Weightage (%)||CMP||Major Supoort||Impact on Nifty (Points )|
|HDFC Bank Ltd.||BANKS||9.91||2,110||1,900||103|
|Reliance Industries Ltd.||REFINERIES||8.78||1,090||980||110|
|Housing Development Finance Corporation Ltd.||FINANCE - HOUSING||6.95||1,937||1,700||100|
|Infosys Ltd.||COMPUTERS - SOFTWARE||6.3||668||580||100|
|I T C Ltd.||CIGARETTES||5.8||279||240||90|
|ICICI Bank Ltd.||BANKS||5.52||362||317||97|
|Tata Consultancy Services Ltd.||COMPUTERS - SOFTWARE||5.02||1,900||1,700||80|
|Larsen & Toubro Ltd.||ENGINEERING||3.87||1,400||1,170||90|
|Kotak Mahindra Bank Ltd.||BANKS||3.61||1,233||1,010||80|
|Hindustan Unilever Ltd.||DIVERSIFIED||2.8||1,785||1,580||37|
|Next 15 Stocks||22||173|
|Major Support level||9,640|
For reaching a Nifty target of 13,700, the best derivative strategy is "Synthetic Call" with LEAP option. Traders and investors are advised to use this complex option strategy after knowing their risks through a derivative expert only. Hedging any open positions against adverse market movements is a key aspect of risk management in derivatives.