NIFTY: "Safe Heaven?" - Bond Inclusion.

22 בספט׳ 2023

The word safe heaven has not been revisited in the financial markets in the last one year. While in all the bear assault, it used to be either the Japanese Yen, Swiss Franc, the Gold or the Bonds. For various reasons, Japanese Yen it at its low. Swiss Franc Post the pause, sold off piercing the 0.9000 mark. Gold is in its own journey, not compensating for the inflation adjusted returns. Less said better about the bonds. It is going to be third year in negative returns US 10 Y hits 4.50%. It is not about pause, the good news is greeting negatively, no recession means higher for longer. WSJ comments that it is time to forget low rates, prepare for higher rates as new norm. JP Morgan reports about inclusion of Indian Bonds IBX coming from June 2024, ideally should be a positive development. It would bring more inflows and that can be a positive factor for the currency. How much of that shift impacts the balance between equity and debt needs another drill down from the total allocation. Safe Heaven is the word that is doing rounds in the spat between Canada and India, any negatives, bull hate, bears embrace. Any gap down today and in-ability to close that gap is a huge bear signal. Additional factors to keep in mind, if one were to infer negative global cues impacting local. Dax is on the verge of break down, Korea and Dow are showing potential Head and Shoulder Pattern. No sin in taking profits off the table and either take light position or stay away. October favours the bears. Few places to hide means, few decisions needed to take. The Graph Retracements are plotted, from the base to the top 0.236 comes around 19400 and from recent base around the 19300 the 0.50% retracement is yesterday low and the 0.618% retracement is 19591. This ideally should hold. This time frame of the graph shows, evening star. The Advance block after posting the fourth one, now erodes half of the second bull candle. Week-end to aid some recovery? Bulls can hope only if we close today above the 19880. Else call writing at appropriate strike or some hedging is warranted. For the day 19630-19830 range is apt.