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Nifty may consolidate between 14300 and 14800 ahead of result season...

*The Nifty witnessed an extreme volatility monthly settlement and ended the month near the lows at 14325. A recovery on Friday helped in reducing losses and the Nifty closed the week with losses of more than 1%. Meanwhile, broader markets also remained lacklustre while both midcap and small cap indices continue to remain under pressure. Going ahead, we expect the Nifty to witness some consolidation ahead of result season, where it is likely to remain largely in the range of 14300-14800 in the short-term

*The Nifty has started the new series with relative low open interest indicating long closure during the recent weakness. However, the premium in April futures is significantly high and remains a concern. Normally, upsides in markets do not bode well with high premium. Hence, volatility is likely to continue in the index in the short-term

*From the options space, uniform activity can be seen at ATM Calls and Put strikes with no major difference in OI base. Along with it, richly valued options are clearly suggesting expectations of volatility next week as well. We believe that levels in the range of 14700- 14900 would be crucial for any change of trend. On downsides, we expect recent lows near 14300 to provide immediate support to the index

*While banking remained a major laggard, rest of the sectors have also witnessed weakness with the auto space seeing a sharp decline last week. Technology stocks are likely to remain in focus ahead of their quarterly results

Bank Nifty: Short covering can be expected only above 34000...

*The Bank Nifty remained highly volatile last week and even moved below our stated support of 33000. However, the late recovery in the index helped it to end the series near these levels with a loss of almost 10% during the series. On a weekly basis, the pullback seen on Friday helped the banking index to end with a loss of near 2%

*The Bank Nifty has started the April series with two and half year high open interest as weakness seen in the March series has prompted fresh short additions. We believe any recovery may be limited till we do not seen any major closure of positions in the banking index

*On the data front, the Call base at 34000 strike holds significantly high OI indicating immediate hurdle for the banking index. A fresh positive bias can be made in the banking index if it is able to sustain above these levels only. On downside, intermediate support can be expected near February settlement levels of 33000, below which downsides can extend further

*The current price ratio of Bank Nifty/Nifty declined further to 2.29 levels. These levels have acted as a resistance in the past. Hence, we expect the banking index to perform in line with the Nifty while focus may shift to other sectors in coming weeks

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