ABHILASH PAGARIA
HEAD OF EDELWEISS ALTERNATIVE AND QUANTITATIVE RESEARCH
Where is the Nifty headed?
HNI/retail category has significantly trimmed their single stock future bets and it now stands at a multi-month low, so overall leverage positioning is lighter. Nifty has found supports at 16,200 and the undertone has turned mildly bullish with immediate resistance at 17,050 and 17,200.
What should investors do after this week’s slump due to Russia Ukraine tensions?
Nifty could continue to see excessive volatility and trade in a broader range. High-conviction stock opportunities are: Escorts– with maximum of two months holding horizon for open offer trade, one can expect 80% of shares to get accepted at INR 2,000/ share. TCS — With the ongoing buyback, we see limited downside and thus until buyback closure (appx 1.5-2 months) stock could see a 10% up-move. Lastly, as per our quant models, the metal pack could see significant outperformance in March series.
CHANDAN TAPARIA
DERIVATIVE ANALYST, MOTILAL OSWAL
Where is the Nifty headed?
The Nifty remained highly volatile with dominance of bears last week as it failed to cross 17,350 and drifted towards 16,200. It witnessed a sharp selloff on monthly expiry day correcting more than 800 points due to global concerns. It recovered around 400 points on Friday with a formation of Bullish candle but overall it has been making lower top – lower bottom for the last four weeks. Major trend of the market is negative as it is trading below key moving averages. But, some bounce cannot be ruled out after the 1,500-point correction from post Budget high of 17,777 zones. Now it has to hold above 16,666 zones for an up-move towards 16,850 and 17,000; while on the downside the support exists at 16,400 and 16,200 levels.
What should investors do after last week’s slump due to Russia Ukraine tensions?
It is good time to accumulate quality stocks and top up the portfolio as volatility may cool off along with a bottom formation. India VIX fell sharply by 16.39% from 31.98 to 26.77 levels. The cooldown in volatility has given some support to the market; but overall higher VIX could continue to keep wider swings in the market. Investors and traders can keep long bias in Mcdowell, Titan, Hindalco, Apollo Hospital, Kotak Bank, Trent, Siemens and Voltas.
RAJESH PALVIYA
HEAD-TECHNICALS AND DERIVATIVES AT AXIS SECURITIES
Where is the Nifty headed?
Nifty failed to hold the 200- day simple moving average (16,903) amid geopolitical tension, global uncertainty and foreign institutional investors’ intense selling last week. On the weekly chart, the index has formed a long bearish candle forming lower high-low compared to the previous week indicating weakness at current levels. The index is moving in a lower top and lower bottom formation on the weekly chart indicating a down trend. Friday’s strong pullback from oversold territory and short covering indicate if Nifty crosses and sustains above 16,750 level it would witness buying which would lead the index towards 17,000-17,400 levels. However, if the index breaks below 16,400 zone it would witness selling which would take the index towards 16,200-16,000.
What should investors do after this week’s slump due to Russia Ukraine tensions?
We expect banking, automobiles, real estate , sugar and capital goods sectors to do well in the near term. One can focus on Maruti , Kotak Bank, HDFC, DLF, Balrampur Chini , Siemens and Hero MotoCorp for this week. The strategy which we are suggesting for the week with expiry on March 3 is an Iron Butterfly, which involves selling one lot of Nifty 16,650 call at Rs 236 and selling one lot of Nifty 16,650 put at Rs 244, and simultaneously buying one lot of 17,150 call at Rs 46 and buying one lot of 16,150 put at Rs 101. Both risk and reward in this strategy are limited and the gains in the strategy will accrued between 17,000 on the upside and 16,300 on the downside. The assumption for this strategy is, Nifty is likely to remain-trade and conclude weekly expiry in the range of 17,000 to 16,300. Maximum profit of Rs 16,650 will happens if the Nifty closes/expires at 16,650. On the other hand, if Nifty expiry is above 16,983 or below 16,317 then maximum loss incurred will be Rs 8,350
