Is the market cheap, fair, or expensive?
The Nifty 50's P/E read against the 10-year government bond yield, cross-checked with a Dow-Theory view of the weekly trend. Together they say whether a breakout has value behind it, and whether a breakdown is worth taking seriously.
Nifty 50 valuation bands
Nifty 50 — weekly trend
Weekly · BSE:HDFCNIFTYTracking the Nifty 50 via the HDFC Nifty 50 ETF (BSE:HDFCNIFTY) — shown in ETF unit price, which closely follows but is not identical to the Nifty 50 index level.
How to read this
The bands. We turn the 10-year bond yield into a "risk-free P/E" (100 ÷ yield). If the Nifty's P/E is near or below that, equities are priced like a near risk-free return — the deep-value zone. Each band above is five P/E points wide: low, mid, then high.
The Dow signal. On the weekly chart we mark the last significant top and bottom. A top is a mountain on the chart: the price climbs into it and falls away from it, formed over at least a month and at least 4% deep. A bottom is the same shape turned over, a valley. A confirmed break above the top marks a turn up — but it only carries weight when valuation is low; in the high band it's momentum without value. A confirmed break below the bottom only carries weight when valuation is rich; when the market is cheap, weakness alone isn't a warning.
The significant top and bottom are defined by a fixed rule: three points on the weekly Nifty chart, at least four weekly bars wide and 4% deep. Read the definition in the How-To library → Levels are updated regularly.
A descriptive reading of the Nifty 50's valuation and trend under a fixed rule set. Not a forecast and not a recommendation to trade.