Market Strength
This research is based on strength of our stock market, Still how long it will move up. What is fundamental base for the market, suppose if it falls down maximum how much we could possible to see down side?. Before that we have to know one thing is clear, i e All world countries stock market index rate is not describing those stocks value, mostly it expressing those countries economy & all economic factors. If we consider stock market index value of one country, we can possible to predict overall performance of that nation. So india's NSE & BSE index value will say our nation growing power. Here we are taking nifty for this research. See the picture below...Nifty EPS Vs PE
- Last 11 years nifty EPS gradually increasing Year by year except 2009.
- Our market all time high was made on 8th jan-2008. After that we got crash on market.
- Exactly we could see EPS was came down on that 2008-2009 financial year.
- After that crash, in the past 4 years our nifty EPS was grown up more than 50%. 2009 EPS was 211.2 now 2013 EPS is 323.4.
- After 2008, still nifty was not able break that all time high but EPS was grown up very well. That means our market making some fundamentally strong base.
- If we check PE ratio , when ever nifty PE came below or near 14 .Then the next year we have seen bull market. If we consider with these data, Maximum to maximum we could see 14x323.40=4528 on down side of nifty.
- So 4528 will be an fundamental base for nifty, Every one know, in the past 4 years nifty low was 4531.15 which was made on Dec-2011. So as per our calculation or prediction nifty already makes that low.
- Suppose if could see any crash means we have strong base of around 4500.
- Suppose if nifty moves up then maximum we could possible to see as per PE ratio 22x323.4=7115. (We took max PE ratio of past years)
NIFTY BOOK VALUE VS PRICE PER BOOK VALUE
- Here also book value of nifty increasing year by year in the past 11 years.
- In the past 4 years nifty was stable between 5250 to 5850 on year end close bases.
- But book value of nifty grown more than 50 % in the past 4 years. Mar-2009 BV was 1208.38, Mar-2013 now BV is 1887.89,
- So nifty based stocks are growing well in the past 4 years but nifty was not moved up. Although nifty creating fundamentally good base.
- If we check price per book value , Maximum we have seen the nifty 5 times of book value & minimum 2.5 times of book value. If we consider with 2.5 times means, Maximum to maximum we could see on down side is 2.5x1887.89=4720.
- So based on PE ratio & Book value, nifty having good fundamental base of around 4500-4700 range.
- Suppose if market moves up then maximum upside we could see... here we have take average price per book value of last 11 years. i e (2.15+3.5+3.82+5.15+4.87+5.09+2.5+3.7+3.7+3.01+3.01)/11=3.68 so maximum we could see 3.68x1887.89=6947
- Based on PE ratio & Book value, maximum to maximum we could possible to see the nifty around 6950-7150 range.
We are almost get clear about the range of nifty, now nifty stays exactly middle of both levels like CAT ON WALL STAGE. If we consider that nifty bottom was already made on 2011 then our next target would be towards 7000 mark. As per fundamental research 6950-7150 will be possible in the next one or two years. Let us wait & watch where market will go???
Please revert your feed back & suggestion to us
nsebsenow@gmail.com
or 8973655142
