Be selective in picking stocks in volatile mkt

The benchmark continued to bleed for the fifth straight session and global cues worsen the investor's sentiment amid quarterly earnings and Budget lined up in a few days. The range for Nifty and BankNifty was higher with the rise in volatility while the bearish move was aggressive as every bounce was sold with much lower levels being tested.

This one sell-off we have seen maybe turn all the sentiments negative at once since now a lot of lower level expectations will play out but given the expansion in prices, we may see some contraction or temporary bounce since that is the nature of prices.

There are a lot of events that are played out, geopolitical factors, earnings, and budget expectations are also pricing in, and further weakness in US markets and major indices below their long term MA, this is adding insult to injury in domestic markets. As said earlier, risk management is important here and not stock picking since cash should also be a position in a portfolio at times like this.

One has to be very selective and pick blue-chips that are available at discount and approach with small investments while avoiding speculative small and midcap companies and cherry-pick based on sound fundamentals.

Any further correction below 16,900 will push benchmark index to lower levels of 16,300 – 16,100

(The author is technical analyst at Finversify)