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00:00Bhavin Mehta, now VP Derivative Strategy of Daulat Capital joins in with a technical and
00:05derivative strategy.
00:06Bhavin, it has been a bit of an anti-climax, especially after what we saw yesterday and
00:11how markets have opened this morning.
00:14Extremely volatile, very clear downward buys, the breadth is weak, Bank Nifty is trading
00:19lower.
00:206th of June expiry, the PCR was anyway looking not so conducive in that sense.
00:26What is the strategy to trade the Nifty?
00:28Would it require bravery to initiate a fresh position on the index right now?
00:35Yeah, good morning.
00:37Definitely today, participants were already anticipating a volatility trade, specifically
00:43yesterday as well as today.
00:45Yesterday, we have seen a sharp up move.
00:47Today, markets have given up most of the gains, closed that gap, moved lower.
00:52What I am seeing is that today till end of day, you will get clarity on the trend.
01:00However, as long as we are holding a lower level of 20 to 100, 20 to 200, my sense is
01:07that we continue to remain in a tight band between 22,100 to 200 on the downside.
01:13And on upside, we are looking at somewhere around 23,100 as a kind of a crucial resistance
01:19zone.
01:20We need to sustain above this level for a fresh momentum.
01:23But if we break down below 22,100 to 200 kind of a range, the selling could be sharp.
01:29Now, in this particular scenario, what we are particularly looking at is how volatility
01:34index behaves.
01:35And currently, it is closer to around 25 kind of level.
01:39If we see a spike, probably towards 30, 32, we may see a sharp sell-off in markets.
01:47But till that time, markets taking a directional call would be difficult in trade today.
01:54So no trades, but let's just try and help people who've taken trades.
01:59If you were long on the market on Friday, or rather Monday, what do you do right now?
02:04Do you take your losses?
02:06I'm guessing because you'd have no choice.
02:08There's no profit being made on any of those Monday trades.
02:10Or do you wait it out?
02:12How would you approach it?
02:13And if you were short, would you take profits?
02:15If you were an FI, who's now clearly laughing their way to the bank, guys.
02:21Yeah, so even from FI perspective, if you look at the kind of trading position they
02:25had taken, there was a lot of volatility from the positioning perspective.
02:29So they covered a good amount of short yesterday.
02:32Prior to that two days, they created a good amount of shorts.
02:35So there was a lot of volatility even from the positioning perspective.
02:40However, my sense is that as long as FI still continue to remain short, there is a high
02:47probability that they will look to book out in the range of 22,100, 200 unless there is
02:53a kind of a black swan event wherein current government may not come with a good amount
02:59of votes.
03:00So my sense is that going forward, the levels will be very crucial.
03:05Currently, it is at 22,500 in trade today.
03:09If that is broken once again, we can see a move closer to 22,100 to 200 on downside
03:16and breakdown below that will be a clear sell call on the directional front.
03:21However, till the time this range continues, my sense is we will go into that narrow consolidation
03:28zone between 20 to 200 to 23,100.
03:32That is the view that we are looking at.
03:36Thanks, Bhavin.
03:36Thanks for joining in today and giving us your thoughts.
03:38We'll spare you giving your stock ideas.
03:40This is a difficult market to really be giving ideas.
03:42So let's avoid that.