Expiry Day Volatility Seen as Nifty Remains Rangebound: Analysts
The Indian stock market has been exhibiting a peculiar trend in recent times, with the Nifty 50 index stuck within a narrow range of 24,500 to 25,200. Despite the index managing to snap a three-day losing streak on Wednesday, the broader technical picture remains unchanged. Analysts are now warning of potential volatility on expiry day, advising investors to watch for a breakout.
The Nifty 50 index has been oscillating within this tight range for several weeks now, with investors struggling to find direction. The index has been unable to breach the upper end of the range, and the losses have been limited to the lower end. This has led to increased uncertainty among investors, with many wondering when the market will finally break out of its range-bound behavior.
One of the key factors contributing to the Nifty’s range-bound behavior is the absence of any significant economic news or events. The Indian economy has been facing a slowdown in recent times, with the GDP growth rate declining to a five-year low. However, the recent budget presented by the government has provided some much-needed relief, with the expectation of a revival in the economy.
Despite this, the Nifty has failed to gain significant momentum, with investors remaining cautious. The index has been supported by the banking and finance sector, which has been performing relatively well. However, the broader market sentiment remains weak, with many investors waiting for a clear direction before making any significant moves.
Analysts are now warning of potential volatility on expiry day, as investors adjust their positions ahead of the derivatives expiry. The Nifty options and futures expiry is scheduled for February 26, and analysts expect the market to be highly reactive to any news or events that may impact the market.
“We expect the Nifty to remain range-bound in the near term, with a potential breakout on expiry day,” said a senior analyst at a leading brokerage firm. “The market is highly reactive to any news or events, and we expect the Nifty to be no exception.”
Another analyst at a leading research firm echoed similar sentiments, saying, “The Nifty is likely to remain range-bound until the expiry day, when we expect significant volatility. Investors should watch for a breakout and be prepared to adjust their positions accordingly.”
In the absence of any significant economic news or events, investors are likely to focus on the market’s technicals. The Nifty has been forming a descending triangle pattern, which could potentially lead to a breakout. However, the market’s psychology remains a significant factor, with investors’ sentiment playing a crucial role in determining the market’s direction.
In conclusion, the Nifty remains range-bound, with analysts warning of potential volatility on expiry day. Investors should watch for a breakout and be prepared to adjust their positions accordingly. The absence of any significant economic news or events means that the market’s technicals will play a crucial role in determining its direction. Only time will tell whether the Nifty will break out of its range-bound behavior and make a significant move.
