Market Outlook — India

Sriram Balasubramanian
3 min readJan 13, 2022

What’s on the cards as Nifty inches towards all-time high!

Photo by Sikandar Ali on Unsplash

Can someone predict or time the market?

Most people will say “No” and boldly claim that none can do it. Why not give it a try and post what you see from the charts?

So, here is my inference on NIFTY 50.

13-Jan-2022:

We are about 2% below the NIFTY all-time high price at writing. Most options traders will close their call positions as we move closer to the all-time high price, acting as a resistance.

Some aggressive traders may open a put or short the index, hoping the resistance stays valid.

While investors do not care about all-time highs, closing or covering their positions for traders is highly time-sensitive. Note that traders generally close positions as we move towards Thursdays and Fridays. This could also add to the market volatility.

Will the index come down or keep going high?

Let’s look at the CBOE Volatility Index or VIX for NIFTY:

Source: Google Finance

At the time of writing, the NIFTY VIX has been fairly constant over the last one month and, in fact, had dropped by 2% on 13-Jan-2022. In general, when the broader market's volatility keeps dropping, the markets shall ascend. One has to note that VIX shall shoot drastically within a few seconds to minutes when the market crashes! To give an example — the NIFTY VIX shot up by over 500% in a matter of days during the COVID-19 crash.

Today, we do not see any such signs, though anything is possible.

Apart from the news from the US that inflation is peaking to the highest ever in the last few decades, there is no major threat to the economies, especially due to Omicron. State Governments have imposed a curfew and…

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Sriram Balasubramanian

Building WIBE to enable people to trade stocks to generate consistent cash flow. I enjoy writing on Wealth of all types!