investment strategy: we advised clients to book profits and stay light until 18,500 came out decisively: Rahul Sharma

“We had a gap on Friday last week and that gap has built around 18,000. So there is a 400 point correction in the general pattern of things. The chart is only going to get more robust and we should see more upside in the coming weeks. As of now, we have advised our clients to book profits and stay light unless and until 18,500 is decisively withdrawn,” says Rahul SharmaDirectorJM Financial Services.



Over the past two days, we are seeing moderate sessions in the market. Is what we see happening? Going forward, how do you read the markets? Will it be range limited moves now?
Yes, it’s been a lackluster session for Nifty, but after such a huge move of around 300 points on the Nifty, some consolidation is definitely possible. The way the data is moving, today it looks like the markets are gearing up for a breakout or a big move, hopefully today-tomorrow.

In terms of the correction – we had a gap on Friday of last week and that gap built around 18,000. So there is a 400 point correction in the general scheme of things. The chart will only become more robust and we should see more upside in the coming weeks. As of now, we have advised our clients to book profits and stay light unless and until 18,500 is decisively withdrawn.

For the day, you might consider initiating a long triangle for the Nifty. It’s a hero or some kind of zero profession. Look to buy the 18,400 calls and 18,300 puts, the total combined premium is around Rs 20-Rs 21. We should see some movement around 3am today. If that happens we should see an expiry in the 18,450 range or if it breaks 18,300 we should see another 70-80 point slide from there.

As a strategy I think the long stranglehold combinations this is more of a high risk, high reward strategy that can be done for the day and overall we expect that ‘a bit of a cool down in the Nifty and around 18,000 we’ll be buyers in the Nifty again.

Back to recommendation stories


In terms of action-specific ideas, where do you see the leadership coming from? Will these always be bank names? Automobiles have been on the back foot for quite some time. Is this also a trend that should continue?
Yes, banking is definitely an industry where profit booking should be done. In fact, Bank Nifty’s put ratio hit a one-month high above 1.4 yesterday. In short, it was also at 1:45. It’s time to be scared now that everyone is hungry for that clue. My feeling is that the banks should see a correction. I think 2000-2500 points on the Bank Nifty can easily be taken out over the next 8-10 trading sessions. If things develop as we see them happening and as far as sectors go, IT is one sector where things are looking up relatively for the good and we think that from a positional perspective. There are great deals to be had in the IT space.

Automotive is another sector where trading can be done in the short term. Net-net, we believe this is a high profit booking call, at least from the banks. It’s definitely quite overheated in the short term and a little correction here should only make things even better in the coming days.

Do you want to recommend stocks?
Yes, we are rather optimistic

. This stock has been consolidating since April. In fact, a cup and handle formation is seen on the weekly and daily charts with the breakout placed around 1800. I feel like the stock has moved a lot. Wherever there has been a delta shift in total open interest.

In fact, over the past four trading sessions, around 15% OI additions have been seen in the stock, so it’s clear that there are some green shoots of great institutional interest creeping in. slowly and gradually into action and we think this stock can be bought for a positional perspective. for about 10% to 12% upside from current levels. Keep a stop loss placed at Rs 1,628 and Rs 1,900 and above, this is where we will see the stock in the coming month.