A surprise in election result then VIX will touch 33-38 levels, Nifty will try to touch 12300-12500 levels before election result. Everyone is factoring BJP win on 23rd May, But what if about Congress win?

A surprise in these kind of events will create more volatility in market and in this case VIX will touch 33-38 levels.

Buy on rumors and Sell on news

The rally which is going on, is till election result only. Once market result is out then I am expecting Selling pressure and then VIX will cool down as well .

(VIX) is a measure of expected price fluctuations in the  Index options over the next 30 days. The VIX, often termed as the “fear index,”

Last time on the day of 2009 election Result Vix hit high of 83, and on the day of 2014 election VIX hit high of 38.

There is no rule that VIX will go high only when Nifty fall, VIX can go high in case of Rally also, VIX is just a case of fear which will remain there in market till the event is not clear.

Result Month Nifty Level Calculations (May 1st, 2019)

In last 4 Election Results on monthly Basis Nifty can hit Higher levels up to 13% and lower levels up to -9%. These levels adjusted as per Surprise in market, Surprise in election result get factored in these levels, for May 2019 it will give you some probability that Nifty can Go high up to 13% from opening Levels of May month, and can go down up to -9% from opening levels of May month. Generally Negative things we got as per surprise in election result.

Like example opening levels of Nifty on 1st May is 12000, there is high chance of Nifty to hit Higher levels of 13560 (13% of open) in May month and on lower levels there is a chance to hit 10920 (-9% of open) in May Month. But in last all 4 election result Nifty emerged as a Global Market place to park money for FII, so we have to Discount some % of Volatility from the past events. ( Assuming Nifty open at 12k on 1st May).

So after Discounting the overall % if Nifty open at 12000 on 1st May then it can hit upper levels of 13116 (9.3%) in May months and it can hit lower levels 11120(7.3%) in May months. ( Here as per Exit polls BJP will get near 255-293 seats, if this number changed then everything will get change). ( Assuming Nifty open at 12k on 1st May).

It’s a simple thing, if BJP get more seats then 293 then Volatility on upper side will remain the same on election day as market is already factoring out BJP win, but if BP gets less than 255 seats then Volatility on lower side will get increase by double ( from 7.3% to 15%). Below last 4 Election Result Analysis.

Result Week Nifty Level Calculations (May 20th, 2019)

Same if we apply to Result Week which starts on 20th May, we can calculate Volatility probability to get an Idea about High and low of Nifty on Result week. So as per calculations Nifty can hit high upto 8% of open levels of week ( if open is at 12000 then expect 12960 as week High)  and can hit low of -4% of open level of week ( If open is at 12000 then expect 11520 as week low). These numbers are adjusted as simple volatility, If there is some surprise then everything will get change, Surprise like if BJP get less then 255 then expect double volatility on lower side.

Result Day Nifty Level Calculations (May 23rd, 2019)

Here comes the D day calculation, on Higher levels expect Volatility up-to 4.7% only and lower levels at 2.8%.  If some surprise then always lower level volatility will get double as we already factoring out BJP win.

Till now we all factoring out BJP win, but if any surprise then lower volatility will increase two times, and numbers will look like this.

Surprise will always get start factoring in market from 20th May, and By April 28, election will be over for 400 seats, so you may get idea about the exit polls. Rest all depends on Market, and in all these things don’t forget RBI policy on 6th June, 2019, where expectations are again .25 BPS cut in rates. If still some bad news from Voting, then rate cut can save market in any kind of turmoil.