It is no doubt that we are seeing massive expansion in Volatility as evidenced by the violent swings of the market. Here’s the chart of India VIX of last 3 Months.
As we can see, VIX has touched low of 14.6 and high of 23.1 in the last 3 months.
Most Surprising Stat of Nifty in the Last 3 Months
Nifty on 27 November - 17,100
Nifty on 27 December - 17,100
Nifty on 27 January - 17,100
Although it is kind of surprising to see the constant levels at the month end, There was extreme volatility with lows around 16400 and highs near 18300 (Almost a 2000 Point range)
What is your view going forward? Are we going witness volatile and rangebound markets or are we going to finally see a big trending move ?
Well nobody can Predict for 100% , but in nutshell what i feel this year gonna be trading Year with Ups and down and Index not going anywhere for below reason:
Uncertainty in Inflation and Interest rate hikes. It will be difficult to get fresh easy money due to hawkish view of central banks around the world and Business are opening with pre covid levels so money will be flowing back to business .
LIC IPO will suck the liquidity in secondary market and every big fall will be bought by people who didn’t invest .So Rise and Fall would be limited.±15%. LIC ipo alone will suck more than 1 lac Crore, DII would be pumping in huge capital to make it sail through, and there are other big Ipos lined up.
Govt would be borrowing heavily as well for capex so again this would make tough job for RBI to manage Interest rates etc.
Business are coming back at pre covid levels this will be positive for the market.
Whenever there is Good and Bad news flow with uncertainty markets would just be full of short covering and long unwinding going nowhere, tough year for investors looks good year for traders
Sharp V reversals in swings tend to compress into a triangle sometimes. Nifty chart on Daily is getting close to finishing this, usually we might get a shakeout or two around boundary before finally resolving into a more trending environment. Hopefully will happen soon, this seems to be the worst phase for my current system …
VIX will reflect gaps too, intraday movement has been tough. We seem to have had a lot of buy the dip behaviour for a long time, small dips keep getting bought - or perhaps its just me.
Anyway, We are out of the Volatility Compression/Triangle. Short Breakout day seemed like it was failing but it held. If we keep putting pressure at lows, we might get a flush. Lets see …
No one can predict the truth, but according to my experience, the surge in inflation, hike in interest rate and geopolitical instability due to the Russia-Ukraine war may make this volatility continue for a long time.
This is the first month after November that…We may not close near 17100 levels.
As it stands before 3 days to expiry, we are down by 1000 points… Will this lead to a new range on the downside? or the trend of zig zag moves is intact?
