Posted By : Kishore B.S
Today was a real roller coaster ride in the market. Nifty opened with a gap up of 50 points and within an hour it filled the gap partly. It traded at 5200 for a large part of the day. But as soon as Mr. Mukherjee announced that the p-notes won’t be taxed, the market just shot up 70 points within a minute or so. Taxation of p-notes was a big concern as this would have lead to FIIs investing through Mauritius square off their positions in this financial year leading to a huge sell off in the market. But that was not the case and we can expect buying opportunities in the market.
Today we came to see that its not the global cues alone which drive the market but the policies of the respective market. Inspite of European and US markets being 1% up yesterday Nifty traded flat till the finance minister announced the policy on GAAR. Market could have broken down below 5150 had the policy gone the other way. So, this shows that at the end of the day its the macro economic factors which matter the most.
The global scenario is very stable. The US, European and Asian markets are showing strength. So, the trade here should be on the long side with a stop loss of 5150. We should keep in mind that expiry is in next two days. So, the markets are bound to be volatile. One should go long with small volumes. Trading in high volumes is not recommended before expiry. Have patience and sit high on cash. No point trading and losing out your money. Buying 5300 call option of April is a good strategy here. Do not trade in March option contracts as you would end up losing money. Do not try to time the market. Just follow the signs market are telling.
(Inputs: Mr. Shubham Deva, A Stock Market Institute associate, IIT Kanpur)