New Year Special: 2025 Insights and Strategies ft. Chandan Taparia

[00:00:00] Welcome to a special New Year episode of Indian Market in Minutes brought to you by Motilal Oswal. Today we are thrilled to have Mr. Chandan Taparia with us, an expert in the field, to offer his insights on the current market environment and guide us through the exciting times.

[00:00:18] So, thank you for giving us your time.

[00:00:28] Thanks, Siwangi.

[00:00:28] Nifty has been making higher highs from the last 8 years and it's only been onwards and upwards. Are we heading into the 9th one?

[00:00:38] Yes, that's quite interesting. Nifty has been moving upwards and now the major support for index is at 22,800 to 23,000 zone with positional target which can take it to 25,000 marks.

[00:00:51] That's the longer time outlook for Nifty, but we have seen some profit booking decline in the last three consecutive months. Is this time to worry or provide a better risk-reward ratio?

[00:01:02] I don't think we should worry because market has already seen a decent corrective move from higher levels and now the major support for index goes at 23,333. And with this support, we are expecting a bounce back which can lead the index towards 24,444 zone.

[00:01:18] All right, so that was the immediate point of view. India Wix is down by around 5% in this month, but index is finding some difficulty and we've seen a rough ride. Do you see any correlation in the market and volatility or is this the new normal which will continue in the Indian derivatives market?

[00:01:37] So market behavior is not being reflected by India Wix as intraday swings are more than its opening to closing levels.

[00:01:47] Usually Wix and index has negative correlation, but market behavior is dull and there's not being reflected by volatility index.

[00:01:56] So I believe due to the dynamic market scenario, even after the lower Wix, market could see higher swings during the days.

[00:02:06] All right, so exciting times ahead clearly. But rollovers are in line and you know, coming to this point where we've seen new lot size changes will also be in the picture. What's your take on all these changes?

[00:02:21] If you look at the roll over data, they're in line, but we are not getting any sense from the data setup because market remains highly volatile in a broader range.

[00:02:30] We believe overall mixed cues are visible as per the price pattern. Even data indicates the same.

[00:02:37] However, revised loss size might demotivate retail traders, but I don't think it could see major change and stance in the market behavior.

[00:02:46] All right. So this is for the retail traders mostly, but fasten your seatbelt for Bank Nifty as well.

[00:02:53] It has been holding 50,000 zones from the last six consecutive months. It's failed to hold above 53,800 and has drifted sharply in the recent times.

[00:03:05] But is there any threat of breaking a multiple support of 50,000 or would it be better to buy near this key support levels with a potential recovery for higher levels?

[00:03:15] Bank Nifty which was outperforming, headed to 53,888 but failed to hold the same and drifted lower.

[00:03:22] The good part is that this index has been holding 50,000 zone from last six months. Every time we have noticed the declines are being bought.

[00:03:31] So still we have the same view that 50,000 could provide a major support to get the bargain buying in this index.

[00:03:39] As of now it is trading below 50 DEMA and resistances are gradually shifting lower.

[00:03:44] And we believe that till it holds below 51,750, 52,000, some profit booking may be there, but not expecting much below 50,000 zone as of now.

[00:03:54] All right. So I believe Bank Nifty is going to see a wild move, but there has been some changes here after the weekly expiry that have been removed.

[00:04:04] So how do we look at this banking index reacting to this fact and how do you know, theta players find theta decay in the monthly expiry premiums?

[00:04:17] So market dynamic has changed and we have to learn from current market scenario and habit of participants.

[00:04:23] Theta Rdk strategies are not working well and market momentum is missing.

[00:04:28] So Gama, Skype and Delta Driftings are also finding some challenges.

[00:04:34] So I believe we have to change as per the market scenario due to the lesser expiry and lower premium ROI will be lesser.

[00:04:43] So option traders need to adjust and change their way of working in the option strategy.

[00:04:49] All right. Option traders need to change a few behavior, but any change in the algo setup due to this lower wigs, higher swings, bigger lot size, less weekly expiries available.

[00:05:02] What's your take on all these changes?

[00:05:05] So lots of things are changing in Indian derivatives market.

[00:05:09] Earlier, we were into the world of every day as expiry day to now a few expiries.

[00:05:14] The load size will revise.

[00:05:16] At lower wigs, higher market swings are happening.

[00:05:20] So talking about algo, it would be tough to deal and we have to adjust and update.

[00:05:28] I believe the backtesting of Sensex might not work.

[00:05:32] Because earlier weekly expiry was on Friday and now that will sift on Tuesday.

[00:05:37] Bank Nifty weekly expiry is now no more available.

[00:05:40] So participants are accepting their focus to Nifty weekly expiry.

[00:05:44] So because of all changing market behavior and price movement, I believe it would be tough for algo traders.

[00:05:52] But again, whatever change happens, it takes time.

[00:05:55] And I believe over the next one month or three months, the new set of rule or new set of algo system will be implemented to navigate the market move.

[00:06:05] All right. So new things to look out to navigate the market.

[00:06:10] But clearly the focus has shifted, you know, to new IPOs that are coming up and selective themes like capital market, hotel space, IT and the most favorite digital India space.

[00:06:23] Any guidance on how to select stocks in this kind of a market scenario out of these pockets?

[00:06:27] Nifty has seen a corrective move along with the decline in bank Nifty and most of the sectorial indices.

[00:06:33] Advanced decline ratio of market is negative.

[00:06:36] But the good part is that selective theme and sectors are doing well.

[00:06:40] We have positive view on capital market.

[00:06:44] Stocks like BSE, CDSL, Capintech.

[00:06:48] Selective hotel stocks could do well including Indian Hotel, Lemon Tree.

[00:06:54] Digital India theme could continue to do well in Indian market.

[00:06:57] Whether we talk about Paytm, Swiggy, Zometto and Policy Bazaar.

[00:07:02] And I think one should focus on these names, generate some alpha with the view that these stocks will connect less and move fast at the time of market recovery.

[00:07:10] That's a wonderful basket that people can make now.

[00:07:14] Nevertheless, year 2024 is going to end on a fantastic note even after the hiccup of the last two months.

[00:07:21] Chandan sir, what's your take for 2025 and any special message for our listeners?

[00:07:27] So my take for 2025 is stay positive.

[00:07:31] There might be some hiccup but I believe the long term India story will continue.

[00:07:37] We always believe that you have to be optimistic in life.

[00:07:40] Then only life will treat you in a better way.

[00:07:43] We might see a corrective move towards 22,800 to 23,333.

[00:07:48] But I believe if market comes to the zone, then recovery and momentum will fast to take it towards 25,026 to 77.

[00:07:57] So final message is that overall sentiment and setup may remain subdued.

[00:08:04] But declines could be bought and by chance if market see the knee-jerk reaction, then recovery will be fast.

[00:08:11] And there is a fact about 2025, life and market.

[00:08:14] That is a fantastic note.

[00:08:18] Now here's a quick recap of the key takeaways for today's episode.

[00:08:23] Talking about Nifty, the strong support can be seen at 22,800 to 23,332 zones with a potential rally towards 25,026 to 77 marks.

[00:08:34] Talking about bank Nifty, this rate sensitive index has to hold above 50,000 but resistances are shifting slightly lower.

[00:08:42] Watch for some meaningful recovery and opportunities here.

[00:08:45] Talking about market volatility, India VIX remains low but market swings demand a sharper focus on strategies like Gama plays.

[00:08:54] For thematic picks, one can focus on the capital market space which includes BSC, CDSL, K-Fintech.

[00:09:00] From the hotel and travel tourism pack, we have Indian Hotel, Lemon Tree.

[00:09:05] And from the digital India space, we have Policy Bazaar and PTM looking quite positive.

[00:09:10] So these sectors are to be kept an eye on.

[00:09:13] As 2024 closes on a resonant note, despite recent challenges, 2025 promises new opportunities for growth.

[00:09:21] Stay strategic, stay informed and stay ahead.

[00:09:24] From all of us at Motilal Oswal, we wish you a successful and prosperous new year.

[00:09:30] Until next time, this was Indian Market in Minutes, helping you turn market insights into opportunities.

[00:09:36] See you soon.

[00:09:37] Shivangi Sardas signing off.