India’s benchmark Nifty closed above 10950 ahead of the RBI monetary policy scheduled on the 7th of February. The RBI might choose to roll-out a dovish policy and push for a rate cut as CPI inflation has fallen to 2.2%, which is below the mid-point of the Monetary Policy Committee’s target.
Buying was witnessed today in Call options around 10921 approx. The bulls are likely to dominate the market unless Nifty trades below 10814 approx. Going forward, Nifty is likely to scale up to 11034 approx if it trades above tomorrow’s range high.
The Outlook for 6th February 2019
Nifty Daily Chart Levels
In today’s session, Nifty Future opened around 10938 approx. The index took support around yesterday’s range high of 10895 approx. Buying was witnessed in Call options around 10920 approx. The market is currently expecting a rate cut of 25 bps on the 7th of February as CPI numbers have dropped to 2.2%, which is below the RBI’s current target of 4%. The market has closed today with a bullish bias and is likely to be stable as long as it holds above 10814 approx. Going forward, Nifty is likely to scale up to 11034 if it trades above tomorrows range high. On the other hand, if Nifty trades below tomorrow’s range low, it might scale down to 10857 approx.
Nifty Hourly Chart Levels
In the hourly session, Spot Nifty has closed around 10934 approx. The index is likely to find support around tomorrow’s range low. If it trades above the range high, it is likely to scale up to 10984 approx. On the other hand, if Nifty trades below, tomorrow’s range low, it will scale down to 10835 approx.
Bank Nifty Options Data
SELF LEARNING GUIDE
How to calculate the“Range” of Nifty
Calculate Delta Neutral zones for the next trading day using “Black Scholes Model”
What is the Black Scholes Model?
The Black Scholes model is a model of price variation over time of financial instruments. The model assumes the price of heavily traded assets follows a geometric Brownian motion with constant drift and volatility. When applied to options, the model incorporates the constant price variation, the time value of money, the option’s strike price, and the time to the options expiry.