Hello reader, hope you’re doing well. As the RBI prepares to release its monetary policy update in the coming hour, the markets are likely to approach with caution and a negative outlook. This is a crucial announcement as central banks worldwide strive to control high inflation rates. The general expectation is that the RBI will increase the benchmark interest rate by 25 basis points and maintain its policy of withdrawing accommodation. On another note, concerns of rising inflation resurface with crude oil prices reaching $81 a barrel after OPEC’s unexpected production cut. Nonetheless, the continued investment in local shares by FIIs, who purchased Rs 806.80 crore worth of shares on Wednesday, provides a positive outlook.
Important points to note:
- With the highest OI concentration at 17500 levels with PE and CE sides having 1.74cr and 1.15cr OI respectively, we can see this level acting as the key pivot point for Nifty today.
- Banknifty currently trading in the gap zone of 40900-41200, and a close + sustaining above 41300 levels will open the doors for more upside on the index.
- Axis Bank, ICICI Bank and HDFC Bank are the heavyweights in this index and are poised for a good breakout from current levels, which can give a good boost for Banknifty in further upside moves.
- Key event for today would be RBI policy meet outcome, so it’s important for all options traders, especially sellers to patiently wait it out for the announcement to be made, post which trades can be taken on the vega drop to gain on premium decay.
As always, risk management is key, and a proper system in place prevents one from losing out too much, in case of outlier events. Have a good trading day, and may the force be with you!
Disclaimer: this post is for educational purposes only, we are not SEBI registered analysts. Trades mentioned here are not trade recommendations. Equity Investments are subject to 100% market risk, please consult your financial advisor before investing.