Nifty 50 Forecast: Pulls Back Slightly After Capping Higher – 15 November 2022

With this, I look at pullbacks as a potential buying opportunity, especially as stock markets around the world seem to be heading into the end-of-the-year markup rally. Further driving equity higher around the world is the perceived easing going to be done by the Fed, and therefore it will help emerging markets with debt burdens. In theory, this makes everything go higher as the US dollar goes lower. I don’t know that I buy that’s going to be the way this plays out, but right now the market does, and at the end of the day that’s all that matters.

Going back to India, it should be noted that there is a bit of an exit is from China by some major manufacturers, and India of course is going to be a major beneficiary of this. If that’s going to be the case, then it makes a lot of sense that the stock market and to a lesser extent, the rupee should both benefit. That being said, if the Nifty 50 were to drop down below the INR18,000 level, then we may have a bit of a deeper correction, perhaps down to the 50-Day EMA near the 17,600 level. That is a fairly steep decline, but it would not necessarily change the overall trend. It would simply be value being offered in the marketplace.

At this point, emerging market stocks are still a bit far out on the risk spectrum, but those who believe that we have seen peak inflation probably are trying to get a bit of a “head start” on the rest of the world. I can think of no better place than India at this moment, as it has held up remarkably well, while some of its major competitors, i.e., China, have wilted due to self-imposed lockdowns and a whole host of other issues.

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