Expiry Day Volatility Seen as Nifty Remains Rangebound: Analysts
After a three-day losing streak, the Nifty 50 index finally managed to snap its downtrend on Wednesday, ending marginally higher. The rebound, however, did little to alter the broader technical picture as the index remains stuck within a tight 24,500 to 25,200 range. As we approach the expiry day, analysts are warning of increased volatility and advising investors to watch for a breakout.
The Nifty 50 index has been trading in a narrow range for quite some time now, with the index oscillating between 24,500 and 25,200. The index has failed to break out of this range, leading to a sense of indecision among investors. The lack of a clear direction has resulted in a flat market, with the index struggling to make significant gains or losses.
Despite the rebound on Wednesday, analysts are cautioning against getting too optimistic. “The bounce is shallow, and the index needs to break out of this range to regain momentum,” said a leading analyst. “Until then, we can expect volatility to remain high, especially on the expiry day.”
The expiry day is a crucial session for the market, as it marks the end of the monthly derivatives cycle. The day is usually characterized by increased trading activity, as investors and traders rush to square off their positions. This can lead to significant price movements, making it an important day for investors to keep a close eye on the market.
In the current scenario, the Nifty 50 index is expected to remain rangebound, with the 24,500 to 25,200 range providing the upper and lower limits. The index has been testing these levels repeatedly, but has failed to break out, leading to a sense of frustration among investors.
The broader market is also expected to remain volatile, with the small-cap and mid-cap indices likely to remain under pressure. The small-cap index has been struggling to regain momentum, and is expected to remain weak in the near term.
The technical picture is also indicating a lack of direction, with the index oscillating in a narrow range. The relative strength index (RSI) is indicating a neutral reading, with neither overbought nor oversold conditions prevailing.
In addition to the expiry day, analysts are also keeping a close eye on the global markets. The US-China trade tensions continue to simmer, and any adverse developments could impact the Indian market. The rupee is also expected to remain under pressure, making it important for investors to keep a close eye on currency movements.
In conclusion, the Nifty 50 index is expected to remain rangebound in the near term, with the expiry day likely to see increased volatility. Analysts are advising investors to watch for a breakout, and to keep a close eye on the global markets. The small-cap and mid-cap indices are expected to remain under pressure, and investors are advised to exercise caution when trading in these segments.
