The Game is over - II

In continuation to my previous article which I wrote on 3rd may, the market has panned out exactly as expected. Nifty had broken 4900 and now trading at 4840.

If the monthly closing is below 4750 than the market will tank further to 4400. Even 4200 or 3800 is not ruled out on Nifty.

Its time for Industrial commodities and Energy commodities to crack.

The major economic center of world are starring at sub par growth for years to come. US, Europe, Japan which together accounts for more than 70% of global GDP will grow below normal rate. I expect China to cool down massively and it will grow at 5 -6% in the next decade. Looking at the chart of China since last three months it was very clear that China is going to break down. 

This will result into lower demand for commodities and Industrial metals which will result into lower prices of commodities. This will also cause slow down in the economy of global commodity exporters like Brazil, Australia, Canada  and Russia. These countries along with US, Europe, Japan and China accounts for 90% of global GDP. 

I think that global industrial metals and Energy commodities are going to correct massively from here. I think its a best time to short commodities. 

Copper chart on MCX

I am pasting the chart of copper traded on MCX. It has broken the long term trend line. and now will correct towards 277 and 250 levels. Similar is the case for other industrial metals and Energy commodities like crude oil.

And as we all know that its advantage India. As India is a large commodity importer it will be given tremendous advantage to India which will be able to buy these commodities at much lower prices to built its lagging infrastructure. I think the next decade will be Indian decade just like the current decade was Chinese.

Game is over- Nifty will CRACK

Nifty current monthly Candle stick  Chart

As per my candle stick reading this month will form a evening star on charts. The candle which will form in this month of may has been plotted by me in the next chart..

Expected Nifty chart at the end of this month. 

Here you can notice that the yellow candle i have made is a hypothetical candle and I expect this months end will look something like this,

The other most important aspect is that it will break the monthly trend line which has been formed since the lows of October 2008.  Moreover this month is a open high candle.

I think this is the best time to sell with a stop loss of 5310. Book profits in your portfolio and watch the markets tank in coming months.The downside from here can be up to 4900 and if markets slips below 4800 downside can be even significant. This point gives the maximum risk reward ratio as risk from here is 2% while down side is up to 6 to 8%. which implies a risk reward ratio of 1:3 to 1: 4