Nifty breakout band appears to be 17800-18270; Bank Nifty downside marker placed near 42200 level By Anand James Usually, traders show a pronounced disinclination to take strong directional bets ahead of the Union Budget. This has been the case this time too, defining the trading construct of the last week, which saw tight trading ranges, slippage in VIX from 17 levels to sub 13 at one point, but at the same time, rise in micro volatility. However, a truncated expiry week, since Thursday is a trading holiday due to Republic day, could lead to a surprise rise in volatility on Monday or Tuesday. Meanwhile, despite cooling in inflation, rate hike rhetoric has continued to be loud, keeping a lid on upside attempts. The fact that VIX is slipping has thrown cold water on directional bets on Nifty. Hence we prefer Nifty Bank which was looking promising even on Friday, when Nifty was kept in tight ranges. Also, Bank Nifty has a tendency to trade in bigger ranges and will provide greater mobility post results of ICICI Bank and Kotak Mahindra Bank which together constitute more than 33% of weight in the Nifty Bank Index. Levels-wise, the breakout band for Nifty appears to be 17800-18270, but we will be watching the performance near 18120 for early entry into moves of reasonable length, given the low VIX. For strategy traders, with expiry and budget in purview, the long butterfly may be attempted along the 17800-18050-18300 strikes. In the case of Nifty Bank, we prefer to take a directional bet on the upside with either long calls, or futures, to stay clear of theta, given early expiry, with the downside marker placed near 42200. (Anand James is Chief Market Strategist at Geojit Financial Services. The views expressed are author’s own.)
Last Friday, WTI and Brent slid 3% after strong U.S. jobs data raised concerns that the Federal Reserve would keep raising interest rates, which in turn boosted the dollar. While recession fears dominated the market last week, on Sunday International Energy Agency (IEA) Executive Director Fatih Birol highlighted that China’s recovery remains a key driver for oil prices.
“If demand goes up very strongly, if the Chinese economy rebounds, then there will be a need, in my view, for the OPEC+ countries to look at their (output) policies,” Birol told Reuters on the sidelines of a conference in India.Price caps on Russian products took effect on Sunday, with the Group of Seven (G7), the European Union and Australia agreeing on caps of $100 per barrel on diesel and other products that trade at a premium to crude, and $45 per barrel for products that trade at a discount, such as fuel oil.
“For the moment, the market expects non-EU countries will increase imports of refined Russian crude, thus creating little disruption to overall supplies,” ANZ analysts said in a client note. “Nevertheless, OPEC’s continued constraint on supply should keep the market tight,” they said.
Kotak Mahindra Capital Company Ltd, ICICI Securities Ltd and JP Morgan India Pvt Ltd are the book running lead managers to the issue.
The equity shares of Blue Jet Healthcare are proposed to be listed on the BSE and the NSE.