Alert - nifty pe > 20

NIFTY PE has crossed 20 and is struggling around there. This is a level to tighten stops / partially book profits. Can our PE sustain there and go up?

in 1992.....the sensex PE was around 50
in 2000-2001 it was around 55
in 2008...it topped @ 28

mkt always trades on xpectations

I think, the period that u have mentioned is related to the peak of bull market.
During bear market period of 2002 to 2003, The PE range was from 10.5 to 19.4.
At the end of 2003, when bull market was already on, we crossed the PE level of 20.

As per my analysis, PE = 20 falls at the higher range of 1 Standard deviation. I.e. market value above this is an exception / abnormal.

Certainly market valuation is stretched.
Moreover, this PE is based on previous earnings. IMO, forward PE will still be higher then 20 cause most of the companies have given lower earning guideline.

Anyway, this number just helps in drawing the big picture and has very little relevance in day/short term trading.

Happy Trading.

Some Historicaldata

STRONG RESISTANCE
Whenever the Nifty’s P/E exceeded 22, it gave negative returns in the next three years
Nifty’s PE (x) 3-year returns (%)
Less than 14 152
14 -16 112
16 - 18 79
18 - 20 51
20 - 22 21
22 - 24 -15
24 - 26 -33
26 - 28 -37
28 - 30 -40

by the way where do you get nifty p/e any free websites ?

Nifty PE is available from NSE website. Navigate under Indices, Statistics.

You are right. Historically, May month has been -ive almost 70% of the time so this time, we had been in remaining 30% zone.

In such scenarios, our stops help us.
This seasonal pattern give us a tradeable idea... not the exact trading system. But one can certainly design a trading system on any idea that works 70% of the time.

Happy Trading.

Seasonal patterns are less probable and I agree with you both

but even by common logic if we pay less price to a good(stock here) ( backed by solid earnings) it's bound to get good returns

Nifty PE, PB, Div yeild is on the left side of the nifty chart here:
http://www.nse-india.com/marketinfo/indices/indexwatch_nifty.jsp

I wanted to know when can I get fundamental data like EPS, Book Value, Debt to equity etc for all companies. Does NSE provide the data like bhav copy?

HI LT,

You can find the info on all companies on moneycontrol

http://www.moneycontrol.com/stocks/marketstats/index.php

Click on any company and you will find all relevant ratios and other info.

look out for PE ratios under statistics. The site allows you to sort by PE within sectors.

I am still looking for a site that gives this for all Nifty stocks on one page!

Hope this helped.