2020 H2 and beyond: where are our markets headed to?

 The first half of the year has gone by and there has been lot of chaos and confusion since my last post. Covid 19 has wrecked havoc. My level of 10000 was comfortably violated and much more. Let us see what can happen in the future.

1. The market is awash with liquidity and disconnected with ground reality. Covid 19 blazes on relentlessly. I expect the markets to move up maybe make new highs and then re test the previous lows or 6500.

2. The markets will remain buoyant in the near future as the US Fed also is pumping in huge liquidity. Next few months will be very good for traders.

3. One must trade also only in blue chips else one can lose one's capital.

4. Gold remains a safe haven and is a buy on dips as a hedge.

5. US Presidential elections are a key turning point and if Trump loses or if there is chaos after the results the markets will nosedive.

The key things for a sustained bull run are:

1. Cure for Covid

2. Stable US Government

3. Stable Indian economic policies

Right now only point 3 is somewhat under control. The run up is factoring in that a cure for Covid is given, things will normalize. If bad loans start popping up as they will after the next quarter results, then the markets will correct.

It is a traders market not an investors markets. Use the rally to throw out laggards.

6350 were multiple tops in the past they will be strong support. 12400 will now be the new resistance points.

2020 - What does it bring for the Indian Equity Markets?

A new year and a new beginning awaits the equity markets. India is on the cusp of a major structural change. The reforms initiated by the Modi Government will now start bearing fruits. Let me summarize what I expect from 2020.

Fundamentals:

1. The Budget will try and put more money in the hands of the tax payers. Expect simplification of the tax structure. As it is the tax payer base is low so it does not make sense to penalize the honest tax payer.

2. Expect the Cess on petrol and diesel to go up as it should be. Everyone fills petrol and diesel so everyone pays taxes. The black or white money debate is extinguished smoothly.

3. Expect disinvestment of PSUs. The Government has no business in running businesses and it should rightly step away.

4. Expect more pain in the short term but a bright long term future. Fast Tag is the best thing which was implemented in 2019. Leakage of revenue is stopped and transparency will be brought in.

5. Expect more political strife, more disruptions and more change.

Technicals:

1. 12300 is a key level. If it closes above this level decisively, then we can expect a rally to above 13000-13300.

2.  I still expect 10000 to be tested which may be totally wrong.

A bright future awaits India and I expect the golden years to just begin. Nifty 25000 is not distant dream and i see it being achieved before the sun sets on the Modi era.

Time will tell what the future holds for India. I predict a bright future.