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Below is F&O expiry expectations By Mr. Chandan Taparia, Head - Derivatives & Technical Research, MOFSL.

Nifty index has been consolidating in between 17777 to 18250 zones from the last 18 trading sessions where declines are being bought but absence of follow up buying is clearly viable in the market. Before the recent consolidation, Nifty had corrected by around 1000 points from its life time high of 18887 to 17765 zones and Technically completed its 50% retracement of the previous up move. It has taken support at key cluster but follow up is missing to drive the next leg of rally. Momentum indicator like Relative Strength Index has given a positive divergence against the price and shown sign of market resilience near major support zones. Looking at overall setup, we believe that this consolidation may end soon and a decisive hold of 18181-18250 zones could attract the fresh leg of rally towards 18442 then 18881 levels, if this Budget supports the market sentiment.

India VIX has been falling down from last few weeks and now hovering near to 14 zones. Lower VIX even after we heading towards Union Budget doesn’t indicate any major swing or fear in the market at current juncture. Till VIX doesn’t surpass beyond 16-17 zones, this market may attract buying on decline stance.

As per inter market study, DJIA has major positional support near to 32500 zones but at the same time major hurdle are also seen at 34500 zones. As of now US market is likely to be in this broader range and domestic trigger could add momentum in Indian Equity market.

Nifty has been witnessing in line rollover compared to the last three months averages but slight declines in roll cost indicates a capped upside as well as down side kind of market behaviour.

We have seen good outperformance in Bank Nifty in the last year compared to Nifty index and recently this rate sensitive index also got stuck but declines are being bought. HDFC bank has taken the lead in this space while other stocks are getting consolidated or completing their price or time correction. Bank Nifty has potential to outperform the market and it requires a hold of 41750-42222 zones to extend this move towards 43500 then 44444 zones.

Bank Nifty has been carrying good long rollovers from last few months and that rollover and position is intact in system.

Sector wise we may see major breakout in PSE (Public sector enterprises) sector which is trading at a breakout of last 15 years and has potential to drive the next move if this breakout holds successfully.

Auto index has given a consolidation breakout with support from bottomed out view of Maruti and selective Auto stocks May see short covering as some shorts were added in these names at the time of decline in this month.

Nifty IT index has seen good recovery led by momentum in NASDAQ and we believe that this sector has bottomed out and selective names from this sector could see buying interest on any small declines.

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