The Loksabha Election Results of 2019 marked the second term of the BJP government by crossing the magical figure of 300 seats along with the dominance of Shri. Narendra Modi leading the bandwagon as the Hon’ Prime Minister of India for the second consecutive time.
So a day before the declaration of Election Results i.e. on 22nd May 2019 Aryaamoney had uploaded a video by the name ‘Loha Garam Hai’ on our YouTube channel. In the video, we had advised our subscribers saying we should trade before the declaration of Election Results i.e. on 22nd May 2019 and not after the results are declared. We had suggested that if you are ready to take the calculated risk and responsibility for your trade then you have an opportunity to earn good profit.
On the 22nd May 2019, we had suggested to Buy Nifty Call of Strike Price 12,000 and even I, myself placed the same bet. So, on the next day, i.e. 23rd May 2019 as soon as the election results were getting declared, a boom was witnessed in the market and we booked around 20% to 25% of Profit in that trade by carrying out Event-based trading.
We know that for carrying out Event-based Trading, one must predict in advance such an event, after the occurrence of which there will be a huge impact on the share market. For using this strategy, one has to trade before the occurrence of the event so that if your bet works, you can make a good profit.
So the declaration of the results proved to be a piece of good news for all the countrymen and as the government got the required number of votes alongwith them, we made an equally good amount of notes (read: money).
Now, what will be the future strategy for trading in the market? If we see the history, we had previously uploaded a video titled ‘Kya Itihas Khudko Dohraiga?’ In that video, we had explained in detail that be it 1998 or 2004 or be it 2009 or 2014, whenever the election results were declared, the market had performed well in the next 2 years and given good results.
Will history repeat itself again this time? During all these years whenever the market has given good returns after the election result, the market valuation and Nifty PE ratio was at a low value. Due to lower valuations, the market gave good results.
Talking about the current situation, we have got a stable government at the center which is definitely a piece of good news but not to forget the fact that the market valuation is currently high and the Nifty PE is around 29 at the moment, which is an all-time high. If we look at the history of the stock market, we’ll find that the Nifty PE has always moved within a limited range of 10 and 30.
Despite the fact that it is a piece of good news for the nation that we have a stable government in place, but the market valuation at the moment is at an all-time high, so which means we should keep our investments minimum in the market.
So while investing in the market or even while trading, we suggest you keep your capital minimum. Hope you like our blog. Until next time…
Happy Trading, Happy Investing!!!
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