Nifty makes history by surging 1100 points in just 9 trading sessions
Few in Dalal Street are aware that the breathtaking rally posted by the Nifty over the past few days has become a part of the history books.
The surge from 10800 to 11900 was achieved in just 9 trading sessions and that too without any big-ticket news or event.
All the earlier surges in the Nifty were event based.
What makes the surge even more commendable is that it came amidst several problems and uncertainties such as Corona, GDP slowdown, India-China hostilities, US Elections, Trump’s Covid affliction etc.
“Last 9 trading sessions, 1100 points higher is Historic, never happened in India markets before,” an expert stated.
Nifty fell from 11800 to 10800 in September, all the bears came with usual arguments, "Corona, Lockdown, High PE, Bad Economy, GDP, etc, etc"
But last 9 trading sessions, 1100 points higher is Historic, never happened in India markets before. (Exception: 2009 event based gap up)
— P R Sundar (@PRSundar64) October 8, 2020
Short-covering led to the surge
According to Nitin Murarka, an expert who is described as “Nifty ke Nishanebaaz“, a massive shorts-squeeze led to the super-surge.
Apparently, institutional punters had loaded up on shorts by buying puts and selling calls and futures in anticipation that the uncertainties caused by the CoronaVirus, US Elections, Trump’s hospitalization etc, etc would cause the markets to tank.
However, when this did not happen and the markets started inching up, the shorters had no option but to start covering their shorts.
This became a self-propelling event with more and more shorters having to cover with every increase in the Nifty.
The same circumstance also led to the Bank Nifty surging an unbelievable 2400+ points in the past 9 sessions.
Interestingly, on 25th September itself (when the Nifty and Bank Nifty were languishing at 11,050 and 21,000 respectively), Nitin Murarka and Anil Singhvi had pointed out that there was a heavy shorts build up of nearly 21 lakh shares in the Bank Nifty.
“Agar 21000 ke upar bandh huva toh Dhamaal ho jayega,” it was rightly stated.
It was also correctly pointed out that the roll-over data indicated that the Bank Nifty would outperform the Nifty.
Video on Discussion with Anil jee on zee business ( Rollover data)- Towards the end explains why bank-nifty moved up 2400 points Refer for your knowledge.@AnilSinghvi_ @ZeeBusiness @smcglobal https://t.co/V9XMtZ8So4
— Nitin Murarka (@nitinmurarkasmc) October 8, 2020
Some traders were able to rake in mega bucks from the surge
A study of Nitin Murarka’s telegram channel reveals that he had foreseen the surge and advised his followers to buy calls and futures.
“Next journey of nifty form 11200 to 11400 will be faster and next journey of bank-nifty from 21500 to 22100 will be more faster. Up move should be led by Bank-nifty stocks. Can expect 11400 and 22100 in the current week itself,” he had stated a few days ago.
“Nifty will get mad above 11290-11300 towards 11400 will reach very fast – trade and mange your trade accordingly Now 11265 futures* Stop-loss not to miss @ 11200 futures,” he advised his followers.
“Keep trading calls without fear – keep stop loss and trade . i do not any resistance in bank-nifty till 22500 will see soon and faster up move in this week If dips better if not than also ride the calls cmp 21650 banknifty futures,” he confidently added.
“In October expiry we at SMC has kept super bullish view from inception of oct expiry from 11000 and 21000 levels. and played aggressively on buying side and within 7 days we reached 11550 on nifty and 22800 on banknifty,” it was said when the predictions came true.
Naturally, the traders were pleased as punch.
YesNifty के निशानेबाज ????
अगर निफ्टी का कोई ओलम्पिक होता तो आप ज़रूर गोल्ड मेडल लाते
— Amit b parmar (@Amitperry7B) October 8, 2020
Regularly follow nitin’s telegram channel his accuracy in past 10 days has been 95%. They were the only to say oct would pe extremely positive & majority of calls exceeded targets. Thanks sir for the guidance
— Sumit Gupta (@sumit22gupta) October 8, 2020
Sir, you are amazing and your data reading is fantastic
— mayank lunawat (@LunawatMayank) September 30, 2020
So far, we have never paid any attention to concepts like “Open Interest“, “roll over” etc with the result that we have lost out on hefty gains that were offered on a platter. It is better if, in addition to mastering the fundamentals of investing, we educate ourselves on these matters as well as soon as possible!