Posted By : Kishore B.S
The Nifty is in a see saw trade right now. One day up one day down. The March expiry is adding to the volatility. Nifty traded in red for the whole day once again testing the 200 day ema and finding support at it. We don’t know for how long will 5170 will hold but for the time being it held. Once again we saw an immediate recovery in the Nifty bringing it back to 5200 levels.
The Asian markets were deep in red. Nifty is showing resilience here. Its not allowing the bears to take control. Its in a trading range of 5170-5250. Now its hard to tell which side it will break. European markets are trading flat today. Now, tomorrow is expiry. We have seen that in most of the expiry weeks
Nifty forms sort of a range and it breaks that range on one side with huge momentum on the day of expiry. Same has happened this week. The sell offs in Asian, US and European markets are done as of now. They will trade flat with a positive bias. Also Nifty is at 5200 near its 200 day ema. Here value buying can come.
The only factor that suggests that Nifty can break on the downside is the government’s policy on GAAR. If tomorrow there is some surprise negative news on GAAR then the markets will react very negatively. But in his last speech the Finance Minister pointed towards not taxing the p-notes. If the same policy is presented the markets will take it positively.
So, i think markets will open in green tomorrow trade in a small range of 5210-5240 till 2 p.m. After that it will break in the upward direction. Its my advice not to trade March contracts as volatility is very high. Go long in valued stocks and buy call options off April.
(inputs Mr. Shubham Deva, A Stock Market Institute Associate, IIT Kanpur)