Explaining the technical setup of the market, Rahul Sharma, Director and Head of Research, JM Financial Services, said that now Nifty has gone into a selling setup due to a huge rise. Unless Nifty goes above 25000, selling will be seen on every rise. This is what is being seen in the market at present. As far as the target is concerned, now preparations are being seen in Nifty till 24500-24200. The October series is the first series in the last 12-18 months where bears have been seen dominating the market. Volatility in the market may increase further in the last 7-8 sessions left in the October series. Rahul’s advice is that till the level of 25 thousand is not reached. Have a sell strategy during the uptrend. He advises long short approach in this market.
Large cap driven selling in the market at this time
Rahul said that large cap driven selling is visible in the market at present. Sell on rise strategy is advisable in Nifty. Among banking stocks on the long side, Rahul sees the setup of ICIC Bank as good. The setup of auto shares on the sell side looks fine. Opportunities can be found to short the auto index.
Market Correction: Be careful in mid and small caps, they will suffer the most in any correction.
Stay away from NBFC shares
Talking about NBFC shares, Rahul said, stay away from these shares now. After a lot of correction, these appear to be bounce bank candidates. In such a situation, any view can be taken on them only after the bounce back.
Selling advice in Bharat Forge and Ashok Leyland
Fresh breakdown seen in Bharat Forge todayThis stock may see a decline of 5-6 percent from here. In such a situation, a sell deal in Bharat Forge would be advisable. The 200 day moving average has been broken in this stock. Now on the downside a level of Rs 1325 can be seen in this stock. That means the stock may see a decline of 100 points from its current levels.
Rahul has sell advice in Ashok Leyland in auto stocksHe says that today a breakdown has been seen in this stock. After the spectacular rise in the last month, now a setup of lower high, lower low seems to be forming in this stock. This stock has fallen below the 200 day moving average. There is a break down at 215. The stock is seen around Rs 217. Short position can be taken in this stock. This stock may slip to Rs 200-195.
Buying advice in 24500 puts
Today Rahul Sharma has advised to take 24500 put of Nifty with monthly expiry of 31st October. It is trading in the range of around Rs 100-110. We may soon see the level of 24500 in Nifty. Buying this put option can also be a hero-zero trade. Here your premium may increase double or even more than double. This option can also act as a hedge for your portfolio.
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