Anil Singhvi decodes correction in stock markets; know importance of today's market closing

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Zee Business Managing Editor Anil Singhvi says that only bears have been trapped in the current Bull Market. Market Participants who are confident and are bullish, have bought on all dips and have made profits in the market. The sentiment of the market and the mood seems to be positive after witnessing correction for 2 sessions.

In yesterday’s session, Bulls were trapped in the last 30 minutes when Bank Nifty collapsed. No one expected SGX Nifty to trade 100 points up today morning, overnight risk will always remain and market participants, who shorted the market yesterday, would be trapped. Losses are happening more due to shorting the markets, participants who are long in the markets are not losing as much in the market.  

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At higher levels, there is always risk that market may fall sharply on any negative news or profit booking, 150 points downticks on Nifty seems a lot, but it is hardly 1% correction in markets. Volatility index seems to becoming uncomfortable right now. Volatility index (Vix) has climbed 40 t0 45% from lower levels and now it indicates that market will remain volatile going forward. VIX Index will increase when volatility in the market would increase. There are some positive as well as negative indications from VIX Index.

Markets are trying to stabilize at current levels and spend some time here. Weak traders will exit the market, weak stock will further correct in the market, after this strong stocks and traders will buy from lower levels with higher conviction in the markets. Then the market will be moving towards higher highs.

Today’s closing will be extremely important to monitor, rather than opening, closing for the day is the key to watch for. If markets close above 14350, then it is an indication that correction is over and markets are ready to go up further. If markets close above 14435, then it shows strength of the market and if the closing is above 14500, then markets will not stop before 15000.

Closing above 32000 levels will be very nice, closing above 32300 – 32350 will ensure good move in Bank Nifty, and if closing above 32500, then participants can see further 1000 – 1500 points up move on Bank Nifty.