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Demonetisation Is Not Allowing Indian Stock Markets To Go Up

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Now experts are saying what I have been saying for long, that, demonetization of old Rs. 500 and 1000 notes, is the only reason Indian markets are finding it hard to recover and go up.

How long will this take, no one can say but one thing is for sure – as soon as the cash withdrawal limits goes away and Indian banks and ATMs will have enough cash in the system to keep giving money as per the requirement of their clients, this cash crunch in the system will go away and some percentage will flow in the stock markets taking it up.

It was expected that this will get over by January 2017, but now it seems it will take longer. So for traders and investors patience is required.

As far as I know RBI is printing new Rs. 100 notes to get rid of cash crunch and other notes as well. Once this will get in the system and the limits to withdraw money from the banks is taken away Indian Stock Markets will get a boost.

What To Trade Now during Demonetisation?

  • For Investors: Keep adding good stocks using the SIP method. Please do not fear. Holding stocks does not have a time limit or expiry date. If you exit with 10% or more profits even after 1 year on the money invested, be happy. Currently inflation is 7%, so you will make 10% profit without paying taxes. This is a great return.
  • For Directional Traders: Please DO NOT trade as long as there is no clear signal of direction. Even in normal circumstances, 90% of directional traders lose money. I am sure due to demonetization this percent must have increased to 95% or more since November 2016. Therefore it is highly recommended please do not take any directional bet either in Future or Options, you may lose money.
  • For Non-directional Traders: Keep trading as direction does not matter. You will still make a profit as Nifty is not moving much and we are taking benefit of that. As written in the course please keep an eye on profits and exit as soon as it is achieved. The way Nifty is moving it looks like stop loss will not get hit and you can exit in profit.

    I will complete How To Invest In Stocks and Why Interest Rates Affect The Stock Markets, next week as a lot needs to be written in both the articles. I need some time.




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  • About the author: Dilip Shaw I started trading stock markets since 2007. However my first 3 years were losses. Then I dedicated almost 1 year on studying, researching, paper trading options and learned a lot in that time. Since 2011 I am trading Nifty options profitably. Call me if you need any help trading options on 9051143004.

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