Markets Whipsaw Traders

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The strategy for the short three-day week would be to remain light and ensure that no major exposure remains when trading ends for the week, month and year on Thursday, March 28…writes Arun Kejriwal

Markets in the week gone by were volatile and choppy. Traders and investors were shaken looking at the intraday volatility, where markets opened positive and then turned negative and vice versa. At the end of the week, they gained on four of the five trading sessions and lost on one.

The net change saw BSESENSEX gain 188.51 points or 0.26 per cent to close at 72,831.94 points while NIFTY gained 73.40 points or 0.33 per cent to close at 22,096.75 points.

The broader markets saw BSE100, BSE200 and BSE500 gain 0.57 per cent, 0.73 per cent and .84 per cent respectively. BSDEMIDCAP gained 1.44 per cent while BSESMALLCAP was up 1.81 per cent.

A sample of the volatility is given below where BSESENSEX gained 105 points on Monday, 89 points on Wednesday, 540 points on Thursday and 190 points on Friday. It lost 736 points on Tuesday. This brings us to total gains on five days of 924 points and a loss of 736 points. Against this, the daily swing which is the difference between the intraday high and low was much higher.

On Monday, it was 671 points, Tuesday was 557 points, Wednesday it was 728 points, Thursday it was 466 points and on Friday it was 943 points. Total intra-week volatility was at 3.365 points against a net change of a mere 188 points. This clearly shows that markets seem to have lost the trend and are drifting in either direction, which is indicative of even sharper moves in the coming time.

The Indian Rupee lost 54 paisa or 0.65 per cent to close at Rs 83.42 to the US Dollar. Dow Jones gained on four of the five sessions and lost on one on Friday. At the end of the week, Dow Jones gained 761.13 points or 1.97 per cent to close at 39,475.90 points. The US FED in its meeting kept interest rates unchanged in a band of 5.25 per cent to 5.50 per cent. This was the fifth straight time that interest rates have been kept unchanged.

Post the meeting, indications remain strong that there will be three rate cuts later in the year, an expected event which is not allowing markets to fall in the US. On Thursday and Friday, some of the IT giants issued profit warnings which caused the Dow to dip sharply on the back of the IT stocks.

In India too we had the repercussions and the IT sector was under tremendous pressure. It was the biggest weekly loser and was down 5.54 per cent. Stocks like Infosys were down 7.71 per cent and TCS lost 7.22 per cent.

In primary market news, we had one listing during the week and as far as the main board is concerned, curtains have been drawn for the financial year 2023-2024. There are no more issues for the year and a couple of issues are expected in the first week of April 24.

There was one listing during the week when shares of Krystal Integrated Services Limited listed on the bourses on Thursday, the 21st of March. The company had issued shares at Rs 715. The listing price was at Rs 795, and the low of the day was at Rs 703.05. The share closed day one at Rs 712.30, a loss of Rs 2.70 or 0.37 per cent. It lost marginally more on Friday and closed at Rs 710.40, a loss of Rs 4.60 or 0.64 per cent.

The week ahead is a very short and truncated week with a mere three days of working. There are trading holidays on Monday and Friday and this would mean that the futures would expire on Thursday, March 28, which would also be the last trading day of the year.

The current value of NIFTY is at 22,096.75 points which is a mere 113.95 points or 0.52 per cent higher than the March series open at 21,982.80 points. With three trading sessions to go, and such a volatile market, the series is clearly up for grabs and can go in any direction.

If the bulls slip up, they could see the series being lost in next to no time. Expect markets to be super volatile over the next three days which would culminate in the end of the series as well.

Markets were under pressure and for a brief period of time seemed to have broken crucial supports at 21,825 points on NIFTY. The lows made were at 21,710 points on NIFTY and at 71,674 points at BSESENSEX. These levels would act as support if there is any further weakness in the markets going forward. Further, the next level of support would be at 21,500 points on NIFTY and at 71,100 points on BSESENSEX.

The strategy for the short three-day week would be to remain light and ensure that no major exposure remains when trading ends for the week, month and year on Thursday, March 28. Use rallies to sell and look at sharp dips to buy in the large cap space only. The current concern about midcap and small cap space remains as of now.

In short, its time over the next three days, not to be adventurous as the financial year 2023-2024 has been a good one for traders and investors in India. Hold on to your profits and don’t squander it away over the next three days, even if the offer looks too tempting.

Trade cautiously.

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