Which way will the stock markets swing on Lok Sabha elections results day?

May 15 2014, 11:25 IST
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It is a foregone conclusion, markets will be highly volatile on 16th of May. It is a foregone conclusion, markets will be highly volatile on 16th of May.
SummaryIf Narendra Modi's BJP does not come to power, stock markets will crash; Adani, BHEL stocks eyed

The stock markets will continue bullish trend if Narendra Modi-led BJP and its allies get over 260 seats and then it is very much likely NSE Nifty may test 7,200-mark post-Lok Sabha election results declaration. While on the either side, if the outcome is totally negative, the markets can hit the lower circuit.

It is a foregone conclusion, markets will be highly volatile on 16th of May. Traders can take advantage of this volatility by trading in options segment which depends on risk appetite of traders. One can go for long strangle strategy in Nifty by buying out of the money Call & Put options of June Month. This can give good returns in short span of time.

Stock which remains in focus are Adani Enterprise, BHEL, ICICI Bank, Axis Bank, PNB, SAIL, Hindalco, Crompton Greaves and Reliance Industries. We are expecting further bullishness in these stocks if election results are in favour of BJP.

- By ROHIT GADIA, FOUNDER & CEO, CAPITALVIA GLOBAL RESEARCH LTD

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