F&O cues: What is the right strategy to trade this market?

Indian equity markets continued to reel under the selling pressure with banking and capital goods shares falling like a pack of cards.

So how should one trade in this current market?

Check out the trading strategies with Sahaj Agrawal, Deputy Vice-President (Derivative Research), Kotak Securities with us.

Smartinvestor : Markets have slumped significantly with Nifty hovering near 5,450 levels. How do you see the trend panning out in the remaining part of the August series?

Sahaj Agrawal : As of now we have not seen any signs on a reversal in the index. But looking at the option positions we expect the index to find support at 5380-5400 levels. This along with volumes in the cash segment would provide some indications. Any bounce back can take the index to 5600 on the higher side.

Smartinvestor : The Bank Nifty is trading close to 9,200 level , what is the next level that you would watch on the Bank Nifty?

Sahaj Agrawal : We are looking at some technical support for the Bank Nifty at 9100. Failure to hold the mentioned level could lead to significant downside in the medium term.

Smartinvestor : How are FIIs positioned on index futures?

Sahaj Agrawal : As mentioned in the earlier interview, the FII segment remains short on the index futures. As of now no signs of reversal are evident.

Smartinvestor : The spike in India VIX is cause of concern for the overall markets. Does this indicate further down-side from here on?

Sahaj Agrawal : India VIX is co-related to negative reactions in the market. Hence a rise in the VIX is indicative of possible downside. This is purely supportive in nature and I do not use this as a primary tool to take directional decisions.

Smartinvestor : What would be the right strategy to trade in this market?

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