As per price action, Nifty was pretty much within the range that we have seen in the previous week and managed to recover the losses marginally. Since it was the monthly expiry week, we have seen writers eating away the premium. As per Derivatives data, Nifty managed to have rollovers of 80% which is above its 3 months average.
Technically, we have seen some contraction in MACD Hist which indicates there may be some sideways consolidation in the coming week.
Our concern is on the strength which is lacking or say deteriorating every week. There is a divergence on RSI (14) clearly which signals a caution in a bullish approach in the short term. Secondly, the trend indicators are showing markets to be in a no-trend state for now while the bias remains bearish in the short term.
In the coming week, We have a very important event, budget, that is about to shape the future trend of Equity markets. There will be possibly an increase in volatility and may further hurt any directional trader for the very short term. Since the importance of the event is high and is able to produce large trend we believe it is better to be on the sideline and see the outcome.
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