What should I trade on 01 September after the sharp correction on Monday? Do you suggest fresh positions now?

The 850 points fall in Sensex was largely driven by the border skirmishes with China at Pangong Lake in Ladakh. New margin system is effective from Tuesday so traders will be cautious and some panic selling, like Monday, is possible. Trade cautiously.

Clearly there has been some panic selling by traders who are not comfortable with the new margin system. The trading situation is likely to get a little more complicated for some time now. In addition, the global players also likely to sell due to MSCI weight reduction.

You can expect the pressure is likely to continue on short term trading positions and cash positions could unwind. There are no fresh calls for Tuesday. However, the calls given on Monday continue to remain attractive, in my view. So the calls are being reiterated.

· Buy UPL at Rs.500-505 for upside targets of Rs.580 in 2 months

· Buy BHEL at Rs.39 for upside targets of Rs.60 in 2 months frame

· Add Federal Bank at Rs.55 for targets of Rs.70 in 1 month

The next couple of days would see markets adjusting to new margin rules, end of EMI holiday and the re-weighting of MSCI Index. We could see bouts of volatility.