Last week – review:
We went into trading with weak global cues, weak technical set up and F&O expiry. We expected bounce back earlier before September series expiry, but momentum failed even on Thursday, when market was down after positive opening.
Approach on Technical: Technical set up continue to remain weak, even after Friday’s bounce, Indices breaking lower end of the range could open further downside, Nifty below 16591 & Banknifty below 37386 – we would turn bearish on market.
This week also, we will continue to focus on VIX and break up or down from current trading rage.
1) VIX stays above 20 & see some bounce on Nifty @ 17166 & Banknifty @ 39432: We will consider it as opportunity to reduce exposure & find short opportunity.
2) VIX goes below 20 level & Nifty @ 17166 & Banknifty @ 39432 breaks above: 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.
Market View & Strategy
RBI Governor in its opening speech mentioned recent tight monitory policy as “Third Storm” and have considered it while forming interest policy. We believe it is soft signal of things may get worse before interest peak-off.
Market going into these quarterly earnings as on 30-Sep-22 with heightened fear as tight monitory policy can continue to overshadow good corporate earnings. Any weak corporate earnings would be very critical and bearish.