Mr. Mustafa Nadeem, CEO, Epic Research
Nifty sustains the positive momentum for the second week, being in the same range for the 12th week, a 3-month consolidation. Nifty saw a rebound last week as multiple positive cues from global markets, technical factors, confluence levels, and positive domestic cues helped bulls to take advantage of lower levels. This is the smallest range for Nifty in the last 7 weeks.
This week it was a smaller range as Nifty was within a short range of 200 odd points as traders were sidelined on the back of heightened geopolitical tensions. The Nifty bank and other heavyweight sectors were seen muted this week with a clear indication that there is not any trend that is underway or seen emerging.
Technically, we have seen writers taking advantage of this sideways range and writing just ahead of expiry to eat the premium. With Volatility being higher as compared to the previous week we do believe it was a rush towards the right side of the table to buy more Puts.
The global cues were largely positive as global equity markets were at higher levels and were trading positive while crude also was seen hovering around $56 mark. The statement from Trump on crude oil being too expensive above $55 was very much discounted positively. Crude is one of the major factors that will be watched amid lower inflation and a neutral RBI policy stand.
The derivative data suggest higher rollover for Nifty bank which may see some trending period while on the flipside Nifty was having lower rollover as compared to its previous 6-month average. This certainly needs to be watched crucially. Metal, Power, Telecom may see some profit booking and weakness in March series while Alcohol, Banking and Finance, and Aviation have seen much better rollovers. GDP data was much lower at 6.6% while RBI has pegged it at 7.4% in 2018- 2019.