31 March 2016


Sensex and Nifty ended today's session on a flat note amid volatility due to expiration of derivative contracts for the month of March. The Nifty futures started the March derivatives expiry session on a negative note at 7734. and subsequently entered positive territory. It breached a key resistance at 7,750 and recorded an intra-day high at 7777. However, after witnessing selling pressure, the contract began to decline gradually, trimming its intra-day gains. Trading was however volatile owing to the expiry of monthly derivatives. Rollovers of contracts were strong as of mid-afternoon, suggesting investors expect the momentum to continue.  The Sensex closed 3 points higher at 25342 and Nifty rose 3 points to settle at 7738.
In the month of March, the and the Nifty rallied 10%  posting biggest monthly gains in over four years In intraday deals, the Sensex today touched high of 25480 and low of 25223 and Nifty moved in a band of 75 points.
Nifty rollover is quite strong, indicating that the market is looking for positive surprises going forward. Even rollover cost has risen as traders are looking at carrying forward long bets, which broadly indicates that market participants, largely foreign investors, are positive and upside trend is likely to continue. As long as the contract trades above the support level of 7700, the near-term outlook remains positive and the contract can retest 7780 levels. Next resistances are at 7800 and 7850.
Traders with a short-term perspective can buy the contract on dips with a stop-loss at 7680 levels. On the other hand, a decline below 7650 can drag the contract down to 7630.
A further fall below the level will have bearish implications and pull the contract down to 7610 or 7540 levels.
Nifty would rally to about 7900 in the initial part of April and, thereafter, stay sideways in the range of 7550–8000. Market undertone is positive but they don't expect Nifty to suprass 8000 level in near term.
Strategy: Buy on dips with stop-loss at 7710 levels.
Supports: 7700 and 7650
Resistances: 7780 and 7825