Market Cap to GDP ratio aka buffet indicator is a long-term valuation indicator. It is a good valuation indicator. The basis for the belief that market capitalization should match the GDP is that the stock market is considered to be a good barometer of the economy.
SBIN is showing short term price rejection pattern which indicates a possible resistance around 295 – 296 zone. And could test the previous swing low 270 zone in the short run. Price closing above 296 on EOD basis invalidates the pattern.
TCS post the earnings results charts are looking bearish. Stretched valuations might turn down TCS in the medium term down towards a test below 2000. Price action suggests a possible weakness in the medium term.
Century Textiles is showing signs of short term trend reversal as strong resistance building around 1150-1155 Zone. More over the price action points to trend exhaustive trade setups. Price acceptance below 1140 will bring more weakness towards 1120 and 1100 levels.
The P/E ratio of the Nifty 500 is at 28.12. This is very close to all time high and last Jan 2008 PE ratio of Nifty 500 was around 27.07. PE ratio is currently in a overvalued zone which is more than 2 standard deviations from the mean.
Siemens is showing signs of short term trend reversal as strong resistance building around 1370 – 1380 zone. More over the price action points to trend exhaustive trade setups. Price acceptance below 1350 will bring more weakness towards 1300 and 1275 levels.
RRG Charts shows a possible underperformance from the Major World Indices like Sensex (India), FTSE (U.K), DAX (Germanay) as the relative momentum and relative strength declines relative to S&P500 and also rotating in the lagging quadrant.
Too many price rejections witnessed in 9700 price zone. Could be a strong resistance zone on EOD basis in the very short term. Also remember that we are in the 9600-9700 zone where last month price spends most of the time in June 2017 series expiry in a highly coiled fashion.
Motherson Sumi price action shows a possible short term trend reversal post hitting all time high yesterday with resistance getting built around 490 reference. Sentiment turned negative on the daily charts post the price rejecting from the all time high. Short term corrections are expected as long liquidations and profit booking is expected in this counter.
RRG Charts shows how world indices is positioned relative to S&P 500. BSE Sensex and Chinese SSEC are showing positive momentum. Hook reversal witnessed in BSE Sensex with regaining momentum and relative strength. Other world Indices like Nikkei , Hang Seng, CAC, DAX , FTSE are showing increased momentum but with decreased relative strength which indicates possible underperformance in the very near term for these indices relative to S&P 500