Nifty PE At 21 , Time To Be Alert
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Nifty PE at 21 , time to be Alert

 
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Markets are now entering Overbought area . I am putting up two charts which shows up historical relationship between Nifty levels and Nifty PE . Nifty PE is now in around 21 and hence its the time to be cautious .

Overbought Examples


Oversold Examples

Also there was good time to buy in Mar when Nifty PE was around levels of 12-13 . historically it has been shown that markets reverses after those levels in nifty PE

Conclusion :

Markets are now in overbought region and hence its time for cautious moves . Invest for short term to get good returns as it can go little more up . But better book profits once PE reaches around 25 levels .



See the detailed article on http://www.jagoinvestor.com/2009/06/value-investing-by-using-nifty-pe.html

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