NIFTY CALCULATOR August 2021.
NIFTY CALCULATOR – CLICK HERE TO DOWNLOAD.
Do check this video on Nifty Calculator - https://www.youtube.com/watch?v=QbmhiLXYx2k
What is Nifty Calculator ?
-> As per the weightages given by NSE for Nifty stocks we have created the Nifty Calculator.
-> Change the expected price and the expected Nifty will change accordingly
-> Create 3 different sheets for yourself–
Pessimistic ( where you put the worst possible prices you think . Default 15% down )
Optimistic ( the best prices possible. Default 15% up)
Neutral/Rational/Technical / Fundamental ( prices on any reasoning )
Please Note as weightages change every day by small margin this will not give an accurate estimate but will be approximate.
How to Guess?
- Everyone has a view on Nifty based on Macro, PE, Valuations, Technicals, Waves etc. Try to grill it down to the constituents. It should be a reflection of your actual guesstimate.
- Just estimating wild scenarios on the top 20 stocks is enough given the 75-80% weight.
- Start with changing default fall to 5-10-15-20-40-80 or rise to 5-10-20-40-80.
- Then change stocks which you think may not do the default move.
- Also do remember there is not a direct co-relation of the economy with the Nifty.
Things to Note
- One of the reasons we keep posting this is to make an actual unbiased guess every month/quarter.
- There have been numerous warnings as to how markets are overheated and economy is struggling from 10k-12k-14k Nifty. Understanding the constituents allows you to realize how Nifty is not supposed to reflect the Economy.
- For example a dip to even 12430 a previous all time highs is now 25-27% away. ( If you are bearish try taking the excel sheet to 12.5k-14k and if u can please send it to me too.)
- For the current month my attempt would be to get a 18k-19k number on the sheet. ( Finding it tough. So time to be very selective on largecaps.)
Interesting Observations
- Top 5 stocks – Reliance, HDFC Bank, Infosys, HDFC, ICICI Bank = 41.13% of Nifty.
- Top 10 stocks constitutes 58.59% of Nifty
- Top 20 stocks constitutes 77.19% of Nifty
- Reliance is the top weight at 9.83%, followed by HDFC Bank at 9.29% . 19.12% of the Index.
- Reliance + HDFC Twins = 25.91% of Nifty ( Hope you get it why Nifty does not depict GDP. 26% of India GDP not equal to Reliance +HDFC)
- HDFC Twins together constitutes 16.08% of Nifty ( same for some time)
- Bottom 25 stocks have less than 1% weight and total weight at 17.14%
Sectoral Observations
- Banks and Financials are now steady at 37-38% for last few months. From a bottom of 33.16 in July 2020.
- Oil and Gas from 16.18% in July 2020 to 11.39% ( Time to watch here for any triggers.)
- Power at just 1.55%. After a long time Media at 0. Metals from 2.15 to 3.76%
- IT weight increased from 14.48% in April 2020 to 18.02% in August 2021 (Time for a pause here)
- Automobile at 4.57%, near March 2020 levels
- Pharma weights stable since last year at ~3.46%
- Banking and Financial , IT and Consumer together contribute to 66.66%. A big shift from being an industrial and investment linked heavy nifty in 2005-2007 to what it is now.
