By Anand James
The persistent fall in VIX has been a central theme for markets, helping directional upsides for over a month now. While this turn has been extremely good for buy-and-hold stock investors, the fate of option traders, as well as intraday traders, have been extremely perilous. The intraday ranges remained extremely tight, requiring timing the entry and picking the trend correctly, assuming extremely important for successful trade. For systematic traders, this reduces the odds of success.
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Mid-cap and small-cap indices saw a decline in the last couple of days, dragged by chemical and healthcare stocks. Just 15% of mid-cap and 11% of small-cap stocks saw more than a 5% cut in the last week. But it is safe to say that small and mid caps are yet to come to the party. Even on Friday, when Nifty breached the year’s high, 20% and 12% of the mid and small caps respectively, were seen pushing below the previous day’s low. In a way, this is good as there are no signs of froth or bubble here, as we would normally see when we breeze past record peaks in benchmark indices.
Nifty will open the week looking to clear the record peak of 18604. If 18200 survives, we could see 18800 this week. Meanwhile Nifty Bank, having already seen a new record peak, might slow down once in the 42500 vicinity, but looks poised for long stretch of upsides aiming 45000 shortly. A fall below 41740 will, however, negate such expectations.
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(Anand James, Chief Market Strategist atGeojit Financial Services. Views expressed are the author’s own. FinancialExpress.com does not bear any responsibility for their investment advice.Please consult your financial advisor before investing)