Introduction

As Predicted, Nifty cracks on both sides, ALL time High maybe the start of false bullishness !

Author
By Rahul Ghose

Published on 29 May, 2021

In my last blog I had categorically written that the tight range of Nifty is the calm before the storm starts.

The reason I used the word storm here was because the volatile nature of the market could be compared to the unpredictability of that of a storm. Nifty not only broke the tight range soon after my blog, But lashed out downside trapping all the bears only break its previous all time high again ! Ergo #Perfect storm

But, let us take a closer look at the texture of the market shall we…. As the corona virus cases kept rising in India, the markets kept holding on and refused to fall at all. In fact the day when the cases broke 3 lakhs on the upside, our marekts went up 100+ points. There is so much bullishness right now that we could actually touch 16000 in the offing. But remember, markets have a tendency to trap consensus. When everybody turns greedy is when I look to turn fearful. Ladies and gentlemen, children of all ages, be on the look out for a correction in the short term, the markets don’t need a reason for this. The way I am playing this is by buying December’21 16000 puts with hedges.

Now coming to some of the other things I had written about, the last few times around. Remember Asian Paints ? Asian paints has zoomed to 2900+, just like we expected, Sbin skyrocketed just like we expected ! Sbin we expect some more bullishness and are holding onto them for the long haul. You guys must start to think that how do I get it right every time : ). What’s more DR Reddy also shot up ! In fact, we have categorically gone right in every blog of mine.

So what’s next on the radar you ask ? We have taken some new positions now, the first one been having bought Britannia for the long term around 3375. Added Reliance around 2000 and are also looking to pick up some bank nifty bees around 34000 to 34500. Our expectation is actually that, Banknifty to slightly outperform the nifty in the very near term before the correction starts. We also are keeping a sharp hawk eye to see when the upward momentum stalls and it starts turning the other side. Remember the FII’s are currently long by 80%+ right now. Any unwinding from them, even to book profits will cause our markets to correct. Hence ride 16000 with a caution on the backside as well. Think of it like a thin layer of ice, we can walk on it and get to 16000 but must place our every step on it with caution.

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