Stocks: What to trade, how to trade it ahead of RBI meet

Also find out what is trend likely to be in mid-caps

Markets have given-up most of its morning gains and have turned flat with a negative bias. The ones weighing on the indices were FMCG majors ITC and HUL along with Sesa Sterlite and Tata Steel.

At 1245 hrs, the Sensex was down nine points at 20,674 and the Nifty gave off 12 points to trade at 6,132.

In the broader markets, the midcap index was down 0.4% and the smallcap index dipped.2%, both underperforming the BSE benchmark index which was down 0.05%.

On the sectoral front, FMCG index was down 2% followed by Metal, Realty, Health Care, Teck, Power and PSU indices down 0.4-1.3%.

Meanwhile, Consumer Durables index edged higher by 2% along with Capital Goods and Oil & Gas indices  up 1% each.

Ranak Merchant, Technical Analyst - Strategies of Sushil Financial Services outlines the strategy to play rate-sesitive case ahead of RBI monetary policy review.

SmartInvestor : Its a lackluster trading session today. Will flat trades dominate the day or is a trend reversal on charts today? What will be the crucial levels?

Ranak Merchant : With Sensex scaling to 3 year highs and Nifty registering new 52 week highs, its hereby re-iterated that in terms of the index some consolidation / correction cannot be ruled out.  The day's lackluster trade would be on account of F&O expiry and RBIpolicy tomorrow, not to forget Fed meet on 29 and 30th. So post a previous week of no events we would have a pretty event heavy week alongwith results that are scheduled.

Nifty levels to watch for would be (spot) close above 6209 for upward breakout and close below 6070 for downward breakdown. Traders advised to reduce leverage and trade light by booking part profits and observe strict stop losses.

SmartInvestor : How are you playing rate-sensitives ahead of RBI policy tomorrow? What are your top picks

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