Nifty likely to face resistance at 17,800: Analysts

SRIRAM VELAYUDHAN
VICE PRESIDENT- ALTERNATIVE RESEARCH, IIFL

Where is the Nifty headed this week?

For the past one month, Nifty has been stuck in a range of around 750 points. The index closed below the 100-day moving average last Friday. While 17,750 and 17,900 are major resistances, a close below 17,450 levels (50-DMA) can take the index back to 17,100 levels. Hence we expect the index to remain range-bound in the short term.

What should investors do?

With policy review at the backdrop, traders can look to set up a Bear Put spread in weekly Nifty put options by buying 17,500 put options and selling 17,200 put options at a cost of `88 for hedging event related risks. In terms of medium-term investing, dips should be used to accumulate quality large-caps like Axis Bank, ICICI Bank, Hindalco, Tata Motors and Hero MotoCorp where the underlying momentum is bullish.

ROHIT SRIVASTAVA
FOUNDER, INDIACHARTS.COM

Where is the Nifty headed this week?

The Nifty rallied after the budget and halted at the 61.8% retracement mark near 17,780. This is an important resistance. On the downside, we have support near 17,244. Overall, the trend in the market remains bullish after coming out of a two-month long correction and we should continue higher toward 18,000 in the week ahead.

What should investors do?

Most likely, the RBI is going to push toward a rate hike going by bond yields. However, this may be priced in. Ahead of the policy, banking stocks continue to look the strongest followed by the metals sector. We expect financial stocks to outperform Nifty and Bank Nifty could head toward 41,300. Specifically, we will focus on public sector banks and non-bank finance companies.

SIDDARTH BHAMRE
DIRECTOR, ALTERNATIVE INVESTMENTS AND

RESEARCH, INCRED EQUITIES

Where is the Nifty headed this week?

The budget has been well received by the markets as we didn’t see any major sell-off. Technically, 17,800 is near-term resistance, but a strong resistance is only around the 18,200- 18,300 zone. Global liquidity parameters like the dollar index depreciating, Brent crude prices rising, US 10-year yield rising are statistically positive for equity markets. All the above factors suggest that one should not hold a negative view on the market.

What should investors do?

Positional traders should have a positive orientation towards the market. Option traders should expect further decline in volatility and use at-the-money options to execute their view. Sector specific, auto stocks have depicted strength with formation of long positions. Also, IT sector bounced back strongly on high volumes and cooled off a bit on low volumes, indicating they too may continue to move higher in the coming week. Bank Nifty charts are looking strong as both private and state-run large-caps have shown strong upward traction.