We are in the 5th elliot wave zone in India. The global economy(NASDAQ, DJ, DAX) is also at an all time high mostly driven by the tech-sector but there are a few cues which hint a pullback.
1. Failing energy sector: in the past few years thermal and nuclear power plants have seen huge investments but these are facing challenges from the renewable energy sector (wind, solar) as these provide much lower unit rate compared to non-renewable sector.
2. Failing IT, BPO sector: Automation and stricter immigration laws have led to a decline in one of the strongest sectors in India leading to increasing unemployment rate which is a leading indicator for declining GDP ( the GDP numbers might have been kept artificially high to promote investor confidence)
3. Tech-based startups (including FInTech) are highly over-valued. Major investments in this sector are not delivering expected results and companies like TaxiforSure, Snapdeal, Flipkart, Ola, Grofers, Peppertap, Housing.com etc. have seen investment on their potential but there haven't been good returns in the past. Most rating agencies have already downgraded the valuation of these companies and some investors have written-off their loans.
In the period close to Q4'17 - Q1'18 major pullback is expected.
1. Failing energy sector: in the past few years thermal and nuclear power plants have seen huge investments but these are facing challenges from the renewable energy sector (wind, solar) as these provide much lower unit rate compared to non-renewable sector.
2. Failing IT, BPO sector: Automation and stricter immigration laws have led to a decline in one of the strongest sectors in India leading to increasing unemployment rate which is a leading indicator for declining GDP ( the GDP numbers might have been kept artificially high to promote investor confidence)
3. Tech-based startups (including FInTech) are highly over-valued. Major investments in this sector are not delivering expected results and companies like TaxiforSure, Snapdeal, Flipkart, Ola, Grofers, Peppertap, Housing.com etc. have seen investment on their potential but there haven't been good returns in the past. Most rating agencies have already downgraded the valuation of these companies and some investors have written-off their loans.
In the period close to Q4'17 - Q1'18 major pullback is expected.