InvestorQ : What is your stock market trading view for 23 March?
indhumathi Sayani made post

What is your stock market trading view for 23 March?

diksha shah answered.
1 year ago

On Monday, the first day of trading in the week, the Nifty closed just 7.60 points down. However, that really does not tell you the full story of what happened during the day. The real story was that the markets bounced back vigorously from 130 points down to just 7.6 points down, and to that extent the sharp bounce was a lot like Friday trading.

There is no clear trend at a sectoral level but there are other cues that appear to be positive. Let me outline a few. The A/D ratio, which is the ratio of number of stocks advancing to number of stocks declining, improved to 30:20 for the Nifty despite closing in the red. Secondly, VIX is around the 20 mark, and that is relatively comfortable level.

Foreign funds may have turned net sellers on Monday with net selling of Rs.787 crore even as domestic institutions bought Rs.543 crore in the stock markets. One this that is apparent is that the FPI flows triggered by the index rebalancing may have largely played out. Now it remains to be seen if the long-only flows also follow.

Global cues are also positive as we go into trade on Tuesday. On Monday, there was a sharp recovery in the Dow and the NASDAQ with the latter gaining 1.6% by the close of trade. Clearly, the FOMC appears to have having an impact. FTSE and DAX were positive in Europe while CAC was in the red. SGX Nifty is up in early trades, but you must await confirmation.

To sum it up, there are some positive cues in the form of tapering of FPI outflows, the stability in VIX and the way the markets have bounced from lower levels. It may be too early to say that the market has bottomed out, but the next few days will indicate if there has been a genuine bounce or whether it is just a dead-cat bounce.