The recent rebound in the market following eight sessions of losses has sparked some optimism. However, many traders do not foresee a sharp uptick coming in the truncated week. A consensus of traders pegged a strong resistance coming in for the headline Nifty 50 at 17,800 points, which will likely limit its upside.
This is based on a quick survey done at the Trader's Mela wherein most traders chose a cautiously optimistic stance for the near term. The event held between March 4 and 5 was organised by Moneycontrol Pro in partnership with Options Bazaar and Pasi Technologies.
Traders Mela is the event management arm of Options Bazaar that facilitates interaction between professional traders and prospective traders.
Professional trader Virendra Kumar Pandey expects the Nifty to face resistance in the zone of 17,760-17,800 points in the coming sessions. He believes support for the index will remain intact at 17,300 but doesn't expect the market to fall much this week. Pandey said that he would wait to see if it manages to surpass 17,800 decisively and if that happens, he would go long on the index.
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"The appreciation of the Indian rupee is another factor that will support the market," Pandey said. He foresees a slight correction in the market once the Nifty first touches 17,800, following which he expects a stronger rebound above that level.
In the long term, he is bullish on the market and expects the Nifty to test the 19,000 mark at least once in 2023, a feat that was missed in 2022.
Angel investor and professional trader Abhishek Kar would maintain a positive stance as long as the Nifty holds above 17,500, a level he sees as a strong support. However, once the market drops below that level, Kar will start shorting the index.
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Another professional trader, Jyoti Budhia expects a mixed trend for the Nifty in the near term given the volatility seen in the market. Apart from 17,800, she believes it will be 18000 that will act as a much stronger resistance. Additionally, she has little hope of the index crossing the 18,000-point mark in the current expiry. She would also use a different trading strategy in that she will be applying stop-losses to trade at all levels before the Nifty crosses the 18,000 mark.
What about Nifty Bank?
Manoj Mishra, a professional trader with expertise in trading the futures and options of Nifty Bank, has a bearish view for the sectoral index. He expects it to settle below 41,000 in the weekly expiry on Thursday.
According to him, the easing of concerns around the Adani Group, which has been a major drag for the constituents of the Nifty Bank index, will not trigger a major momentum in the sector. "Apart from that, the relentless selling by foreign institutional investors who own a major chunk in banking stocks will also act as another dampener for the sector," Mishra said.
He believes that the resistance at 41,500 for Nifty Bank can even go on till the next quarter. In such a scenario, he suggests investors to go for long bets whenever the Nifty Bank moves closer to 40,000-40,500 and square off positions in a range of 40,900-41,000.
In terms of a banking-focused portfolio, Mishra suggested investors make a kitty consisting of a couple of large-cap private banks for every two-three small- and mid-cap banks. Holding large-cap banks will help investors limit their risk exposure and safeguard capital while small- and mid-cap banks will flush out higher profits, but they also involve much greater risks, he said.
Kar sees support for the sectoral index at 40,700 and would not go short on the Nifty Bank as long as that level is defended. On the upside, resistance was pegged at 41,500, a level just 150 points above Nifty Bank's close on Monday.
Even in case the sectoral index manages to cross its resistance level, he would refrain from going aggressively long and wait for another rally of around 300 points to gauge the sustainability of the upside momentum.
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