February–March 2026 Investment Update
A geopolitical shock weakened market structure in February; tactical shorting with futures and selective long-term entries shaped a March rebound — without assuming that the market itself had recovered.
- A US–Iran escalation spiked crude and weakened market structure in February — breadth collapsed (~20–30% of stocks above the 200-DMA) with indices below key moving averages.
- The response was tactical: futures-based short positions (banks and other sectors) as the primary driver, plus selective value-based long entries in PSU banks and autos — no aggressive buying into weakness.
February and March 2026 were shaped by geopolitical uncertainty, weak breadth and unstable market structure. The approach centred on strategic shorting using futures alongside a few selective long-term entries. Short positions in bank and other-sector futures, combined with disciplined risk control, carried the period, while aggressive buying into a weak market — catching falling knives — was avoided.
What Happened
February — shock and drawdown. Escalation in the US–Iran conflict drove a spike in crude oil prices and broad global uncertainty. Market structure weakened sharply: breadth was very low (only ~20–30% of stocks above their 200-DMA), indices traded below key moving averages, and volatility was high with repeated failed recoveries. It was a month of drawdown driven by macro pressure.
March — a tactical rebound, not a market recovery. Markets did not stabilise or recover structurally; price action stayed fragile and selective. The adaptation was to increase short exposure using futures (banks and other sectors) while avoiding broad long exposure. Gains came primarily from short-side execution, not market strength.
What Mattered
Geopolitics → oil → markets. Crude oil is the most important macro variable right now — if only one chart mattered recently, it would be Brent (UKOIL). Elevated oil prices mean inflation risk and pressure on equities.
A structurally weak market. Breadth remains poor, with most stocks in downtrends. In such markets the long side is selective while the short side offers better risk-reward. Selective strength does exist but is limited — some sectors such as PSU banks and autos are showing better long-term value zones, though timing matters, and not all value translates into immediate upside.
What Was Executed
The core approach used futures-based short positions as the primary profit driver, reduced reliance on long-side trades, avoided weak structures and emotional entries, and took only selective long-term positions where value was visible. In February, exposure was kept controlled through a sudden macro shock; in March, the bulk of the work came from shorting with futures across banks and other sectors, with minimal reliance on long trades.
Current Positioning
The primary edge remains tactical shorting within a weak market structure. Selective longs are limited to PSU Banks and the auto sector — value-based entries rather than momentum trades.
Risk Snapshot
Position sizing remains controlled, weak-RS stocks (with a high probability of deeper drawdowns) are avoided, and there is no aggressive long exposure in unstable markets. The focus is to survive the volatility and capitalise tactically.
What Went Right, and What to Improve
What went right: a quick shift from long bias to short-side dominance, avoiding broad market buying, and correctly identifying where not to deploy capital. What to improve: a faster response during the initial geopolitical shock, and more aggressive scaling on confirmed short setups.
Next-Month Playbook
Continue focusing on short-side opportunities using futures; add to PSU banks and autos only on proper setups; and stay defensive until macro stability improves, especially in oil. Crude oil is the dominant driver to watch. Falling knives in weak stocks are best avoided; banks and autos are the focus, but only once the geopolitical situation stabilises rather than during ongoing uncertainty.
Glossary
- RS (relative strength): performance versus the market.
- 50-DMA: short-to-medium-term trend support.
- 200-DMA: long-term trend indicator.
- Prepared from the original Vesara market letter for February–March 2026.
- Source: Gmail - Investor Update (Feb–March 2026).pdf
- Content has been edited into a research-report format; the substantive market views, sector observations and figures are drawn from the source material. Monthly performance figures are omitted by design.