First half of the March series is likely to be challenging for market participants.
By Sameet Chavan
The escalated geopolitical tension between Russia and Ukraine has sunk the global equity market. Our domestic market was not spared with this ongoing crisis, and hence we witnessed complete chaos all over. The benchmark index Nifty50 has plummeted nearly 5 per cent which is probably the biggest single day fall in many months.
Our market started the expiry day with a massive gap down tracking the global cues, which got aggravated in the latter part. The technical supports were fumed one after another, and no sign of respite was seen throughout the day. The 200 SMA & DEMA both got irrelevant to provide any kind of relief in the market as the benchmark index retained the lower grounds since the opening tick. The way the market fell like a bottomless pit, it has certainly dented the sentiments across the participants. As far as levels are concerned, there is no immediate support visible before 16000 – 15900 and if things worsen, we may see lower levels than this as well. On the higher side now, 16600 – 16800 has now become a sturdy wall and till the time, we do not reclaim these levels with some authority, it would certainly be challenging times for markets. This is possible in the near term only if tensions eases off with respect to Russia and Ukraine.
Though considering such scenarios from history, one may infer the situation as an opportunity for investments in selective counters in a staggered manner and not hurry for the ultimate bottom hunting. However, looking at the market scenarios and the volatility index, it is advisable to stay cautious and avoid any aggressive bets for the time being.
In yesterday’s turmoil, India VIX surged to 32 levels that was earlier seen during the initial phase of pandemic. FIIs continue to sell in cash whereas the long-short ratio for Index futures has slipped to 47%. For the first weekly series of March month the open interest is scattered both on CALL and PUT side. We however sense some support around the 16000 whereas resistance can be seen around 16500 followed by 16800. First half of the March series is likely to be challenging for market participants and hence till the time global tensions does not fade away, it would be difficult to project any levels. Just to keep some levels handy, in case of any extended correction towards 15800 – 15500 – 15200 and 34000 – 33000 for Nifty and Bank Nifty, respectively, one can certainly look to go long. However how things unfold, that time will tell, but as a trader one needs to follow strict risk management rules.
(Sameet Chavan is a Chief Analyst-Technical and Derivatives at Angel One. Views expressed are the author’s own. Please consult your financial advisor before investing.)