Market Analysts Anticipate Range-Bound Trading as Domestic Markets Lack Clear Direction

As market observers look ahead to the upcoming week, domestic markets are poised to start off with minimal enthusiasm. The Gift Nifty's current indicator, which hovers at 22,480, suggests a flat to slightly negative opening, contrasting with the Nifty March futures' previous close at 22,500.95.

Neutral Start Amidst Global Influences

In lieu of significant market catalysts, analysts project a range-bound trend in domestic markets. With high-level earnings out of the way, investors are shifting their attention to global developments. The impending Federal Reserve Chair's testimony and the European Central Bank's policy announcement later in the week are anticipated to keep investors on their toes, maintaining a cautious stance.

Market Strategy and Outlook

Experts from SBI Securities anticipate that the news flow will likely spur stock-specific movements. The present trajectory suggests a potential continued uptrend, with the Nifty testing resistance levels in the short term before facing any significant pullbacks. The lower boundaries of this movement are expected to find support at previous high zones and the 20-day Exponential Moving Average.

Advised Trading Strategy

Amid this backdrop, traders are advised to adopt a strategy that capitalizes on daily fluctuations—buying during intraday dips and selling during transient upturns, according to Shrikant Chouhan from Kotak Securities. Nonetheless, the selective approach is particularly accentuated for trades involving mid- and small-cap stocks, as noted by Siddhartha Khemka from Motilal Oswal Financial Services.

Mandar Bhojane from Choice Broking analyzed the Open Interest data, indicating a concentration of call options at 22,500 and 22,800 strike prices, while puts are heaviest at the 22,200 strike price. Such data suggest the levels at which traders expect the market to pivot.

Global Market Context

Internationally, stock markets present a mixed picture, with Asian markets responding to an unconvincing performance in the US. The blend of international uncertainty and domestic tranquility is setting the stage for what appears to be an uneventful trading environment in the immediate term.

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