The upcoming March F&O series is anticipated to witness notable volatility on Dalal Street, with a mix of bullish and bearish swings. Historically, the market has closed the March derivatives series higher and lower on five occasions each, indicating the potential for significant market movements.
FIIs Positioning:
Foreign Institutional Investors (FIIs) have commenced the month with relatively light positions, with index longs standing at 35 percent. Additionally, there have been thin rollovers observed in both the Nifty and the Nifty Bank.
Market Sentiment:
Despite the cautious start, there is a prevailing sentiment leaning towards the positive side, driven by factors such as the strong domestic GDP reading and controlled fiscal deficit. The recent recovery in Wall Street, marked by three consecutive days of gains in the Dow Jones Industrial Average, adds further support to the optimistic sentiment.
Market Expectations:
Considering past trends, there's a possibility that the market may incline towards positive territory in the March series, especially with general elections scheduled for later in the year. Historical data shows gains of approximately six percent and 6.5 percent in comparable series in 2014 and 2019, respectively, leading up to the elections.
Market Strategy:
Investors are advised to maintain a positive stance on large-cap stocks while exercising caution with midcap and smallcap shares. Existing long positions should be monitored closely, with suggested intraday and closing stop losses for both Nifty and Nifty Bank. Similarly, recommendations are provided for new positions in both indices, catering to aggressive traders looking to capitalize on potential price movements.
Overall, the March F&O series is anticipated to be dynamic and eventful, offering opportunities for traders to navigate through the market's fluctuations while keeping an eye on global and domestic developments that could influence market sentiment and direction
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