The last two weeks have been tumultuous for the equity markets.
With the straight fall there has been a lot of change in the weekly sectoral trend for the markets.
The main points are:
1. The # of sectors on Sell / Lev Sell mode is 10 with CNX IT Sector in Lev Sell mode for last 2 weeks.
2. Nifty was in Neutral mode as of Friday 6th May.
3. The trend for 11 sectors is Neutral which is quite high indicating the ongoing sideways movement in many indices.
4. Broader market indices like BSE 500, BSE Small Cap, BSE Mid cap and Nifty CNX 100 are in Neutral zone.
5. The cyclical index Metal, Realty, Cap Goods and IT are in bearish mode while the defensive sectors are in Neutral mode.
The weekly color table:
With the straight fall there has been a lot of change in the weekly sectoral trend for the markets.
The main points are:
1. The # of sectors on Sell / Lev Sell mode is 10 with CNX IT Sector in Lev Sell mode for last 2 weeks.
2. Nifty was in Neutral mode as of Friday 6th May.
3. The trend for 11 sectors is Neutral which is quite high indicating the ongoing sideways movement in many indices.
4. Broader market indices like BSE 500, BSE Small Cap, BSE Mid cap and Nifty CNX 100 are in Neutral zone.
5. The cyclical index Metal, Realty, Cap Goods and IT are in bearish mode while the defensive sectors are in Neutral mode.
The above points clearly shows that the trend is towards accumulating the consumption stocks rather than being in Growth or High beta stocks.
This is inline with the earlier Macro call of Monsoon trade. See Post here.
The weekly color table:
In that case , do you recommend strangle writing for Nifty MAY series. IVS @ 20% are decently attractive. We have IIP, EGoM meet and state elections results lined up in the week, so the prudence of option writing is debatable.
ReplyDeleteHi,
ReplyDelete@Raghu: Well the trade does seems good as the IV's are way high and trend has been neutral.
But I feel that it is better to use color trend with buying options (call or put) instead of selling options which could play havoc with Money Management for a trader.
@Other: Pls read Disclaimer before acting on any such strategy.