Last week review:
We expected correction on Indices are Nifty made high at 18096 & Banknifty corrected after making new 52-week high of 41840.
We would be working for 3 probabilities to read the next direction.
1) VIX stays above 20 & see some bounce on Nifty @ 17740 & Banknifty @ 40351: We will consider it as opportunity to reduce exposure & find short opportunity.
2) VIX goes below 20 level & Nifty @ 17166 & Banknifty @ 39432 holds: if market stops further correction and holds on to crucial level, consolidation in range on Indices within 2% percent will mean that market will be waiting for further cues & development, which will be corporate earnings.
3) VIX stays above 20 & correction continues: Current momentum is down and market is getting hammered into with fresh weakness and we would prefer to hedge & reduce exposure.
Going into F&O expiry for September series, technical indicate market in oversold zone and due for a bounce back from lower level. Market have corrected around 3% to 5% after US Fed decision outcome. Decoupling theory of Indian market will be tested in next week ahead of RBI MPC policy on 30-Sep-22.
We would avoid chasing momentum and prefer to sticks to stocks where we are comfortable holding on for long period of time.