Expiry Day Volatility Seen as Nifty Remains Rangebound: Analysts
The Indian stock market, as measured by the Nifty 50 index, has been stuck in a rut lately, with the benchmark index remaining rangebound within a tight 24,500 to 25,200 band. Despite a marginal gain on Wednesday, which snapped a three-day losing streak, analysts are not expecting a significant breakout anytime soon. Instead, they are warning of increased volatility on expiry day, which could lead to some wild swings in market movements.
The Nifty 50 index has been trading in a narrow range since the start of the year, with the index’s relative strength index (RSI) and moving average convergence divergence (MACD) indicators suggesting a lack of momentum in either direction. The index has repeatedly failed to breach the upper end of the range, and analysts are now looking for a clear breakout to signal a change in trend.
“Until we see a clear breakout above 25,200 or a breakdown below 24,500, the trend will remain neutral,” said a senior analyst at a leading brokerage firm. “We are expecting high volatility on expiry day, and investors should be prepared for some wild swings in market movements.”
The analyst’s comments are echoed by other market experts, who are also predicting a volatile day on expiry day. The increased volatility is expected to be driven by a combination of factors, including the futures and options (F&O) expiry, the quarterly earnings season, and the ongoing trade tensions between the US and China.
The F&O expiry is expected to be particularly active, with many market participants taking positions ahead of the event. This could lead to some sharp price movements in individual stocks and the broader market, as investors adjust their positions to reflect their expectations.
“The F&O expiry is always a key event in the market, and this time is no different,” said another analyst. “We are expecting a lot of activity in the options market, particularly in the near-term expiries, as investors look to lock in profits or protect their positions.”
The quarterly earnings season is also expected to be a key driver of market movements in the coming days. Many of India’s largest companies are set to report their earnings in the coming weeks, and analysts are expecting a mixed bag of results.
“While some companies are likely to report strong earnings, others may struggle to meet expectations,” said the analyst. “This could lead to some volatility in the market, as investors react to the news.”
The ongoing trade tensions between the US and China are also expected to continue to impact the market. The tensions have been a major driver of volatility in the global markets in recent months, and analysts are expecting the situation to remain fluid in the coming days.
Despite the uncertainties, many market experts are advising investors to remain cautious and avoid making any impulsive decisions. With the market remaining rangebound, investors should focus on building their positions gradually and avoiding any sudden changes in their portfolios.
“Investors should be prepared to ride out the volatility and avoid making any knee-jerk decisions,” said the analyst. “The market is likely to remain rangebound for some time, and investors should focus on building their positions gradually.”
In conclusion, the Indian stock market is expected to remain rangebound in the coming days, with analysts warning of increased volatility on expiry day. The F&O expiry, quarterly earnings season, and ongoing trade tensions are all expected to drive market movements, and investors should be prepared for some wild swings in market movements. With the market remaining neutral, investors should focus on building their positions gradually and avoiding any impulsive decisions.
