So should you book profits in some of the IT counters or hold on to your gains at this moment?
Check out the trading strategy for IT and other front-line stocks with Shshank Mehta, Derivatives Strategist at Shah Investor's Home with us.
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Smartinvestor : How is FIIs activity in the F&O segment?
Shshank Mehta : FIIs continue to remain net sellers in Index Futures, they were net sellers to the tune of Rs858 crores in the previous trading session. We, however, recommend not to interpret too much out of FII activity data as we do not have break-up of their activity instrument wise coupled with reasonable level of activity in Index Futures of foreign Indices such as S&P and DJIA.
Smartinvestor : India VIX has spiked up to 19 levels or so. Does this indicate a bear markets ?
Shshank Mehta : India VIX or the Volatiliy Index is an indicator of uncertainity in the markets. It usually starts moving north with further downside expected in falling markets. So, yes spike in India VIX should be seen as a caveat to traders with a bullish view to be cautious in creating long positions or holding long positions. It, however, does not mean that traders with a bearish may go short only on the basis of India VIX moving up.
Smartinvestor : Bank Nifty slumped below 10,000 in today's trade. How are you approaching this index?
Shshank Mehta : We observe strong resistance in Bank Nifty Futures at 10620-10640 level are advising clients to go long on Bank Nifty only if it gives a decisive close above 10650 levels. I understand Bank Nifty Futures are currently trading much lower levels. We, however, do not advise traders with a bullish view create long positions at current or lower levels as we observe Bank Nifty Futures to be in unchartered territory and hit a new low in the days to come. Strategy right now should be short this Index on spikes. Crating short postiion near our suggested levels or on any bounce-back can give significant returns in Bank Nifty Futures with a stop loss of 10700.
Smartinvestor : IT stocks have outperformed so far. Will you advise investors to book profits in any of the counters here or will you go against the tide?
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