Ahead of the weekly expiry day, markets traded in a narrow range as participants are waiting for the outcome of the Fed event which could drive momentum in the short term

Nifty traded within a narrow range in Wednesday’s session as the market participants are awaiting the Fed meeting outcome. Nifty ended the day around 17150 with marginal gains while Bank Nifty ended the session around the 40000 mark.

Ahead of the weekly expiry day, our markets traded in a narrow range as participants are waiting for the outcome of the Fed event which could drive momentum in the short term. Nifty has witnessed a pullback move in the last couple of sessions from its support zone of 16800-16900 but is yet to cross its near near-temple of 17225. Also, the Bank Nifty is trading below its 20 DEMA support and a breakout above these resistances is insured for any pump move in the market. If we look at the derivatives data, FII records high short positions in the index futures segment with 92 per cent of their positions on the short side (mainly in Nifty Futures), while the Client segment has significant long positions outstanding. So it seems to be a tug-of-war with both the ties and a directional move would be seen when either of them will be in a hurry to unwind these positions. Hence, this global event of Fed policy could be the trigger that could lead to the unwinding of positions.

Traders are advised to watch global cues at open tomorrow and trade in that direction. As far as levels are concerned, the 20 EMA hurdle for Nifty is around 17320 while 16850 will be seen as crucial support.

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The author is Lead Research, 5paisa.com

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