Nifty indices and many stocks closed well below the 200 dma this week
People’s mindsets are also in 200 DMA
Warning bells are ringing in their ears since months, but no one ready to believe markets are not worthy to invest
Now investor mindset will cross 200 DMA and reach 2008 slowly then they realize the reality
Following maybe the reasons for downfall of NIFTY below 200 DMA
Falling tupee, crude price increase due to sanctions on iran(the real problem may start in November once all the countries stop importing from Iran), CAD, etc
With no rate hike, RBI failed to stop the falling rupee.
With cuts in excise duty of petrol and diesel, there will be reduction in govt revenue and widening of the fiscal deficit. In the short term, inflation may come down. But if crude price increases continuously, this cut may not be enough and inflation will increase
Today, the Trimuf deal was signed with Russia. There is a possibility that US may impose sanction using CAATSA act. There is also another possibility that US may give a waiver and i hope we do not receive any sanctions
All these factors create an uncertainty and maybe the reason for continuous downfall of nifty.
IMHO The 200DMA is just another MA that has over the years, for some reason acquired the status of the Lakshman Rekha of whether a stock is bullish or not. I think this question is moot, since the risk determines whether to stay or jump off. If i were to use the 200DMA as a filter to take hold/ sell decisions, i might be a LT investor just waiting gleefully below the 200DMA to average away!
Bro FIIs dont know what is 200 DMA, they are selling aggressively due to -
- Stronger US markets
- ILFS crisis and scams laden India
- EM contagion and currency crisis plaguing India
- Upcoming election season uncertainties in India
Our market was and is total PHEKU market, midcaps have multipled 10 times, is this Equities or Bitcoin, soon all the froth will be wiped off
Soon I feel many other DMAs will come one by one, FIIs are exiting India fully