InvestorQ : Can you give me your trading view on 04 March and what is your strategy when the Nifty and Sensex are so volatile?
Dia Deshpande made post

Can you give me your trading view on 04 March and what is your strategy when the Nifty and Sensex are so volatile?

Answer
image
diksha shah answered.
1 month ago
Follow

After sharp gains on Monday and Tuesday, the Nifty and Sensex had another strong day. With another 1100 points gain on Sensex now both the major indices are getting very close to their previous highs all over again. The markets have actually recouped Rs.941,000 crore in market cap back in the first three days of this week and this week will be crucial.

Several indicators have been really positive for the market. On Wednesday, markets largely belonged to the bulls with a 43:7 advance/decline ratio. The rally was led by Reliance Industries along with financial stocks and metals leading the markets higher. On the positive side, the VIX tapered on Wednesday to around the 22 levels, which is more manageable.

FPIs continued to be net buyers to the tune of Rs.2,089 crore while domestic financial institutions bought Rs.393 crore on Wednesday. The FPIs have now infused over Rs.4500 crore in 3 days of this week and clearly the MSCI reallocation appears to be favouring India. It augurs for positive flows in the month of March too.

However, global cues have not been too encouraging. Major technology stocks led by Apple cracked on the back of a sharp spike in treasury yields. This led to the tech-laden the NADAQ caving by over 270 basis points on Wednesday. Europe still remained positive but the SGX Nifty has given hints of gap-down opening for Thursday trades. F&O could add to volatility.

Regarding your question on trading view, we are at a level when the volatility is part of the game. Hence your approach has to be more stock-specific. Any play on the Nifty must be largely through options only and any futures positions on the Nifty must ideally be hedged with options or with contrary futures positions. Naked positions can be risky.

4 Views