Nifty Index at 5690 is Equal to 4905

The look back continued....!

The last regular update of The Ultimate Momentum Signal was published on 23rd August 2011 before the stoppage. The data included in that update was for the trading day - 22nd August 2011. If we go back to those days, it is seen that the Nifty index was breaking down from the previous support of 5250 - 5300 levels at that time. Nifty index closed at 4905 as on 22nd August 2011.

Now, let me reproduce the Nifty trailing fundamentals data from that old update. 

 Nifty Trailing Fundamentals  

"The trailing Price Earnings Ratio  ( PE Ratio ), Price to Book Value ( PB Ratio ) and Dividend Yield ( DY Ratio ) of the Nifty Index  were at 17.68, 2.89 and 1.55 respectively as on 22nd August 2011."

And this is what this author opined in the post dated 19th August 2011 about the then Nifty trailing fundamentals.

"This blog had repeated time and again that Nifty valuations were stretched, and now, it seems that market is in the process of clipping the same. As the market has been pricey for a very long stretch of time and most market participants became used to the higher valuations, the present correction may appear to be very deep. However, it remains to be said that the trailing valuations have just fallen to the long term averages now. It is a very simple matter that the long term averages are supposed to be somewhere in the middle of the valuation ranges and therefore, at least for half the period used to calculate the averages, the index valuation have remained below the long term averages. Therefore, there is no such near limit at which the fall may get arrested. But, it is a fact that market has become comparatively safer for long term investors for they can buy at somewhat reasonable prices from now on and this itself may provide a bit of margin of safety and long term upside."  

Now, let me show the present data related to the trailing valuation of the the Nifty index. Here it is!

It doesn't need much effort or analysis to see that the the present day trailing fundamentals of Nifty index, which closed at 5690 as on 28th March 2013, is more or less equal to that of Nifty at 4905 in August 2011.

Now you know reason behind the seemingly absurd claim in the headline of this post; "Nifty Index at 5690 is Equal to 4905"! And this is why, despite the tall claims of impending heavy falls by some analysts, the index isn't going anywhere now a days. But this doesn't mean that the index will not fall further. But any steep falls from these levels will be good opportunities for the long term investors to add the index to their portfolios. 

To know about the long term valuations of the Nifty index please read Nifty Fundas.  

Cheers and Prosperous Investing!!!  

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